NEW YORK (Reuters) - WillScot Corp (WSC.O), the largest U.S. supplier of mobile office trailers, is nearing an all-share merger with Mobile Mini Inc (MINI.O), the biggest U.S. provider of portable storage solutions, sources close to the matter said.
Coming in the midst of a global coronavirus outbreak that has sent stock markets reeling, the plans show how companies can still brave market volatility to do deals.
The creation of a powerhouse in modular space and portable storage with a market capitalization close to $4 billion (£3.1 billion) could be announced as soon as Monday, when WillScot reports fourth-quarter earnings, one of the sources said.
The sources, who asked not to be identified because the matter is confidential, did not disclose the share-exchange ratio for the proposed deal and cautioned that negotiations could yet fall apart at the last minute.
WillScot and Mobile Mini did not immediately respond to a request for comment outside business hours.
All-share deals can be easier for companies to negotiate in times of market volatility because they depend on the relative valuation of the companies rather than their absolute value, as is the case with cash deals.
Shares in companies in the same industry will often move roughly in sync during times of significant market swings, giving them more comfort to proceed with a deal.
Headquartered in Baltimore, Maryland, WillScot has a fleet of approximately 160,000 modular space and portable storage units. Private equity firm TDR Capital LLP is a major investor in WillScot, which has a market value of about $2 billion.
Mobile Mini, based in Phoenix, Arizona, has a rental fleet of about 198,000 storage containers and office units, as well 12,700 liquid and solid containment units and pumps that it also rents out. Its market capitalization is about to $1.7 billion.
The merger would come less than two years after WillScot acquired Modular Space Holdings Inc, another office trailer company, for about $1.2 billion.
Hedge fund Elliott Management Corp last year built a stake in Mobile Mini and pushed for a merger with WillScot, Reuters reported.
The Donerail Group, an investment firm led by William Wyatt, a former executive at activist hedge fund Starboard Value, also built a stake in Mobile Mini last year and pushed it to explore a deal, Reuters reported.
Reporting by Greg Roumeliotis and Rebecca Spalding in New York; Editing by David Goodman