Please ensure Javascript is enabled for purposes of website accessibility

Why Mobile Mini Stock Popped 5% Today

By Rich Smith - Mar 2, 2020 at 5:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Congratulations! It's a buyout!

What happened

Shares of Mobile Mini (MINI), a provider of portable storage containers, jumped to close the day 5.2% higher on Monday. The move came after the company announced plans to merge with rival WillScot (WSC) to create "an industry leading specialty leasing platform with a highly predictable modular space and portable storage leasing portfolio, complementary capabilities, and a strengthened customer value proposition."

Portable storage container being delivered on the bed of a tractor-trailer

Image source: Getty Images.

So what

The merger will be organized as a buyout of Mobile Mini by WillScot, with the latter company exchanging 2.405 shares of WillScot for every one share of Mobile Mini acquired. The companies are characterizing the deal as "approximately $6.6 billion" in size, including their respective debt loads.

Mobile Mini has a $1.7 billion market capitalization, but a $2.7 billion enterprise value once cash and debt are factored in. Will Scott has a $2 billion market capitalization and its enterprise value is $3.7 billion.

The companies anticipate that their combined "diversified and predictable lease revenue streams" of $1.7 billion annually and "robust free cash flow" of "greater than $290 million" annually will enable them to service their combined debt load.

Mobile Mini will be getting a small premium at the valuations stated, which seems appropriate, as it is currently profitable while WillScot is not.

Now what

Both companies' boards of directors have already approved the transaction. Assuming stockholders and regulators do likewise -- and no competing bids emerge to scotch the merger -- the companies hope to close this deal by the end of the third quarter of 2020.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mobile Mini, Inc. Stock Quote
Mobile Mini, Inc.
MINI
WillScot Corporation Stock Quote
WillScot Corporation
WSC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.