WillScot Mobile Mini (NASDAQ:WSC) has agreed to acquire B2B rental company McGrath RentCorp (NASDAQ:MGRC) in a cash-and-stock deal valuing McGrath at $3.8B.
McGrath (MGRC) shareholders will receive for each of their shares either $123.00 in cash or 2.8211 shares of WillScot Mobile Mini (WSC) common stock. The transaction represents a premium of 10.1% to McGrath’s closing stock price on January 26, 2024.
The deal will see 60% of McGrath’s (MGRC) outstanding shares converted into the cash consideration and 40% of McGrath’s outstanding shares converted into the stock consideration. It also provides McGrath shareholders approximately 12.6% ownership stake in the combined company.
Subject to approval by McGrath (MGRC) shareholders, regulatory approvals and other customary closing conditions, the transaction is expected to close in the second quarter of 2024.
WillScot Mobile Mini (WSC) expects the combined company will generate approximately $700M of annual free cash flow by end of the first full year following closing, with significant further accretion to free cash flow margins over time.
The combined company will also have a strengthened financial profile, with combined 2023 revenues of $3.2B and adjusted EBITDA of $1.4B, including run-rate operating synergies.
The deal enhances WillScot Mobile Mini’s (WSC) North American footprint in turnkey space solutions.
Shares of McGrath RentCorp (MGRC) jumped ~10% premarket on Monday
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