A $700 million merger announced Friday with a California storage company is expected to bring broader national and international markets to Tempe-based Mobile Mini, and it will help offset weak housing sales affecting the company, executives said.
Mobile Mini is already one of the largest portable storage companies in the United States, said Steven Bunger, president and CEO of Mobile Mini. The merger with Mobile Storage Group of Glendale, Calif., is expected to add even more to the customer base.
“This (merger) represents a highly strategic transaction for Mobile Mini,” said Bunger. “One of the big advantages will be our ability to more easily move available units within our fleet to where they are needed.”
The merger is valued at more than $700 million, he said.
Bunger said the combination will add 21 locations in the United States and 17 in the United Kingdom, increase earnings for 2008 and generate a minimum of $25 million in savings for the newly combined companies, Bunger said.
The proposed savings would be the result of combining some branches, consolidating corporate functions and headquarters, and reducing some operating expenses, he said.
“We look forward to a significant reduction in capital expenditures,” Bunger added. “The combined companies should be free cash flow positive.”
Bunger estimated the merger would become official in June. Mobile Storage Group provides portable storage units in the U.S. and the United Kingdom. Under the agreement, Mobile Mini will assume about $535 million of Mobile Storage Group’s debt. It will acquire all outstanding Mobile Storage Group shares for $12.5 million in cash.
Mobile Mini, whose headquarters are at 7420 S. Kyrene Road, also said Friday its fourth-quarter profit dipped 11 percent as a result of higher costs and interest expenses as well as a weak housing market in the southwest.
Mobile Mini has more than 165,000 portable storage units and 66 offices in the United States, United Kingdom, Canada and the Netherlands.