Mobile Mini $1 billion asset-based revolver out to senior managing agents

By Sara Rosenberg

New York, April 1 - Mobile Mini Inc.'s proposed $1 billion asset-based revolving credit facility is currently in the senior managing agents round, and the retail launch is expected in the next month or so, according to a market source.

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

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

Proceeds will be used to help fund the acquisition of Mobile Storage Group Inc. from Welsh, Carson, Anderson & Stowe in a transaction valued at $701.5 million.

At close, about $600 million will probably be drawn under the revolver.

Under the transaction agreement, 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.

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 be about $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.

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