McGrath (MGRC) Stock: Bullish After A Takeover Bid

McGrath RentCorp (NASDAQ: MGRC) shares exhibited an upward trajectory in Monday’s trading session, marking a notable 10.74% surge to conclude the day at $123.75. This positive movement in MGRC stock followed a takeover bid.

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WillScot Mobile Mini Holdings Corp., a prominent player in innovative temporary space solutions, announced yesterday the finalization of a definitive agreement with McGrath RentCorp (MGRC). This agreement signifies WillScot Mobile Mini’s acquisition of McGrath, positioning itself as a leading North American provider of turnkey space solutions with an augmented geographic footprint and a more diversified platform. The transaction holds potential for enhanced value across key customer segments.

The combined entity is set to serve a customer base exceeding 85,000, benefiting from expanded distribution of Value-Added Products and Services that facilitate turnkey space solutions. Additionally, the merger is expected to yield commercial and operating synergies through combined branch resources and infrastructure. The combined sales and customer base will enjoy access to the industry’s broadest array of space solutions and operational expertise.

This strategic merger provides a robust foundation for McGrath’s continual growth and prosperity, offering both customers and employees an enhanced platform. It gives McGrath shareholders the opportunity to benefit from both the future upside of the merged firm and immediate cash value. The deal demonstrates the MGRC team’s commitment, the company’s strength, and the beneficial solutions it provides to customers.

The terms of the deal are that each share of McGrath can be exchanged for 2.8211 shares of WillScot Mobile Mini ordinary stock or $123.00 in cash. McGrath plans to convert 60% of its existing shares into cash and the remaining 40% into stock. The deal sets McGrath’s enterprise value at $3.8 billion, encompassing around $800 million in net debt. The per-share consideration offers a 10.1% premium over McGrath’s closing stock price on January 26, 2024.

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