McGrath RentCorp, a California-based firm, has recently made headlines with its impending merger with WillScot Mobile Mini Holdings Corp. This move is set to create a dominant player in the North American turnkey space solutions industry. This development comes just a year and a half after the company was last discussed, highlighting the rapid pace of change in the business world.

The merger between McGrath RentCorp and WillScot Mobile Mini is not only significant for the two companies involved but also for the industry as a whole. The deal, structured as a mix of cash and stock, offers shareholders of McGrath RentCorp the option to receive $123 per share in cash or 2.8211 shares of WillScot Mobile Mini. This represents a premium of 16.7% over the current trading price of McGrath RentCorp shares.

One of the key drivers behind this merger is the complementary nature of the two companies’ operations. Both McGrath RentCorp and WillScot Mobile Mini derive a significant portion of their revenue from modular operations, with McGrath RentCorp also having a stronghold in electronic test equipment rentals. The combined entity is expected to generate around $3.20 billion in revenue annually and operate approximately 475,000 rental units.

In addition to the operational synergies, the merger is projected to yield around $50 million in annual run rate synergies within 24 months of closing the deal. These savings will come from various sources, including branch infrastructure optimization and logistics enhancements. While capturing these synergies comes with one-time costs of $35 million, the potential long-term benefits for shareholders are substantial.

Financially, both McGrath RentCorp and WillScot Mobile Mini have shown strong performance leading up to the merger. McGrath RentCorp has experienced steady revenue and profit growth, while WillScot Mobile Mini has seen impressive expansion in sales and profitability. This bodes well for the future prospects of the combined company.

Overall, the merger between McGrath RentCorp and WillScot Mobile Mini presents an intriguing opportunity for investors. By swapping out a pricier firm for a more cost-effective one and potentially realizing synergies, shareholders stand to benefit from the deal. However, with a shareholder vote scheduled for July 11th, there remains some uncertainty surrounding the acquisition. Investors will be closely monitoring developments leading up to this crucial date.