Mobile Mini launches $1 billion asset-based revolver to retail investors

By Sara Rosenberg

New York, May 13 - Mobile Mini Inc. held a bank meeting on Tuesday to launch its proposed $1 billion five-year asset-based senior secured revolving credit facility to retail investors, according to a market source.

The deal has already gone through its senior managing agents round.

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

The revolver is talked at Libor plus 250 basis points, with an unused fee that can range from 25 bps to 37.5 bps based on usage, the source said.

Financial covenants include a maximum leverage ratio, minimum fixed-charge coverage ratio and minimum utilization rate, each of which will only be tested if excess availability under the borrowing base is less than the greater of $100 million and 10% of the total commitments under the credit facility.

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.

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 19.8% for Mobile Storage Group stockholders.

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. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired in April.

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

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