Mobile Mini plans $1 billion asset-based revolver for Mobile Storage purchase

By Sara Rosenberg

New York, Feb. 22 - Mobile Mini Inc. has received a fully underwritten commitment for a new $1 billion asset-based revolving credit facility to help fund its acquisition of Mobile Storage Group Inc., company officials said in a conference call Friday.

Deutsche Bank, Bank of America and JPMorgan are the lead banks on the deal.

The company expects the revolver to have an interest rate of Libor plus 200 basis points.

At close, about $600 million will probably be drawn under the revolver, officials added in the call.

Mobile Mini is buying Mobile Storage from Welsh, Carson, Anderson & Stowe in a transaction valued at $701.5 million.

Welsh, Carson, together with the other equity holders, will be converting substantially all of their equity ownership in Mobile Storage into Mobile Mini preferred stock.

Under the agreement, Mobile Mini will assume about $535 million of Mobile Storage's outstanding indebtedness and will acquire all outstanding shares of Mobile Storage for $12.5 million in cash and shares of newly issued Mobile Mini convertible preferred stock with a liquidation preference of $154 million.

The convertible preferred stock will be convertible into 8.55 million Mobile Mini common shares, representing a conversion price of $18 per Mobile Mini share and resulting in fully diluted ownership in Mobile Mini of approximately 19.8% for Mobile Storage Group stockholders.

Pro forma for the acquisition, Mobile Mini estimates that total debt will approximate $960 million. In 2007, Mobile Mini generated EBITDA of $133.9 million, excluding stock compensation expense, and Mobile Storage Group generated EBITDA of $86.1 million, adjusted for certain items and excluding stock compensation expense. With $25 million of forecast cost synergies, the adjusted EBITDA for 2007 is about $245 million, resulting in pro forma leverage of 3.9 times.

The transaction is expected to close as early as June, subject to approval by Mobile Mini stockholders, governmental approvals, receipt of the new revolver and customary conditions.

Tempe, Ariz.-based Mobile Mini and Glendale, Calif.-based Mobile Storage are providers of portable storage.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.