McGrath RentCorp's stock saw a surge on Monday as mobile storage company WillScot Mobile Mini Holdings announced its acquisition of the business rental company in a substantial $3.8 billion deal.
The Acquisition Transaction
The transaction, valued at 60% stock and 40% cash, is expected to be finalized in the second quarter, pending approval from McGrath shareholders. Upon closing, McGrath stockholders will have the option to receive either $123 in cash or 2.8211 shares of WillScot Mobile Mini common stock for each of their shares.
Speaking about the acquisition, McGrath Chief Executive Joseph Hanna expressed his confidence in the positive outcome for all parties involved. He stated, "This combination provides McGrath customers and employees a platform for continued growth and success, while providing McGrath shareholders with immediate cash value as well as participation in the upside potential of the combined company."
WillScot Mobile envisions the combined company generating approximately $700 million in annual free cash flow by the end of the first full year following the closing. This promising outlook foretells fruitful prospects for the new alliance.
The deal offers a significant premium of 10.1% to McGrath's closing price on Friday. As a result, McGrath's shares experienced a notable 10% rise in premarket trading on Monday, reaching $122.94. Simultaneously, WillScot Mobile shares saw a minor decrease of 2.9% to $43.82.