Double Eagle gets $900 million commitment to buy Williams Scotsman; Algeco cuts ABL facility

By Marisa Wong

Morgantown, W.Va., Aug. 21 – Double Eagle Acquisition Corp. entered into a debt commitment letter on Aug. 21 for a $600 million senior secured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA, Merrill Lynch, Pierce, Fenner & Smith Inc., Deutsche Bank AG, Canada Branch, Deutsche Bank AG, Cayman Islands Branch, Deutsche Bank AG, New York Branch, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding, Inc., Goldman Sachs Lending Partners LLC, Credit Suisse AG and Credit Suisse Securities (USA) LLC are parties under the commitment letter.

In addition to the ABL facility, the commitment letter also provides up to $300 million of bridge loans, to the extent the company does not receive $300 million of gross proceeds from the issuance of senior secured notes.

Proceeds of borrowings under the ABL facility and the bridge loans will be used to help finance the cash consideration of Double Eagle’s planned acquisition of Williams Scotsman International, Inc. from Algeco Scotsman. The transaction, valued at $1.1 billion, is expected to close in October.

In connection with the transaction, Algeco amended its ABL credit agreement on Monday to permit the sale of Williams Scotsman to Double Eagle and to reduce commitments under its U.S. revolving credit facility.

Commitments under the U.S. revolver were reduced to $150 million, and the amendment allows the company to make a related prepayment under the facility, according to a press release.

The credit facility amendment also lets Algeco repay and terminate its Canadian revolving facility, as well as reduce the revolving commitments under its Australia/New Zealand revolving facility to $120 million.

In addition, the amendment permits Algeco to complete its acquisitions of Iron Horse Ranch and Touax’s European modular division.

The ABL facility amendment is conditioned on and takes effect when Algeco completes its sale of Williams Scotsman to Double Eagle.

According to the release, Williams Scotsman will use about $625 million of the cash consideration to prepay some amounts outstanding under the U.S. revolver under Algeco’s amended and restated syndicated facility agreement dated Dec. 19, 2013; roughly $40 million of the cash consideration to prepay in full all amounts outstanding under the Canadian revolver; and about $10 million to repay outstanding letters of credit of its direct subsidiaries.

Algeco said it expects to use a portion of the remaining cash consideration to finance its acquisitions of Iron Horse and Touax, respectively.

Double Eagle is a special purpose acquisition company based in Los Angeles. Algeco is a business services provider with global operations based in Baltimore. Williams Scotsman is Algeco’s modular space and portable storage rental services business, also based in Baltimore.

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