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EX-10.10 - EX-10.10 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d10.htm
EX-99.4 - EX-99.4 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex99d4.htm
EX-99.2 - EX-99.2 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex99d2.htm
EX-99.1 - EX-99.1 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex99d1.htm
EX-21.1 - EX-21.1 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex21d1.htm
EX-16.1 - EX-16.1 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex16d1.htm
EX-14.1 - EX-14.1 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex14d1.htm
EX-10.16 - EX-10.16 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d16.htm
EX-10.15 - EX-10.15 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d15.htm
EX-10.14 - EX-10.14 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d14.htm
EX-10.13 - EX-10.13 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d13.htm
EX-10.12 - EX-10.12 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d12.htm
EX-10.11 - EX-10.11 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d11.htm
EX-10.9 - EX-10.9 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d9.htm
EX-10.8 - EX-10.8 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d8.htm
EX-10.7 - EX-10.7 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d7.htm
EX-10.6 - EX-10.6 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d6.htm
EX-10.5 - EX-10.5 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d5.htm
EX-10.4 - EX-10.4 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d4.htm
EX-10.3 - EX-10.3 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d3.htm
EX-10.2 - EX-10.2 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d2.htm
EX-10.1 - EX-10.1 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex10d1.htm
EX-3.2 - EX-3.2 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex3d2.htm
EX-3.1 - EX-3.1 - WillScot Mobile Mini Holdings Corp.a17-27887_2ex3d1.htm
8-K - 8-K - WillScot Mobile Mini Holdings Corp.a17-27887_28k.htm

Exhibit 99.3

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The unaudited pro forma condensed combined financial information present below has been prepared in accordance with Article 11 of Regulation S-X. Capitalized terms used herein and not otherwise defined have the meanings given to them in the Company’s Current Report on Form 8-K to which this pro forma financial information is an exhibit. The following unaudited pro forma condensed combined financial information presents the pro forma effects of the following transactions:

 

·                  the reverse acquisition between Double Eagle and WSII (the “Business Combination”);

·                  the impact of removing certain businesses that provide workforce housing solutions in remote areas included in the historical WSII financial statements that will be retained by Algeco Group and certain pre-transaction structuring, including the settlement of certain intercompany debt;

·                  the issuance by WSII of the Notes, the entry into the ABL Facility and the extinguishment of existing debt (the “Refinancing”)

 

Our predecessor company, Double Eagle, was incorporated on June 26, 2015 as a Cayman Islands exempted company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Until the closing of the Business Combination, Double Eagle was a blank check company. Double Eagle has neither engaged in any operations nor generated any revenue to date. Based on its business activities, Double Eagle is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

 

The following describes the operating entities:

 

WSII

 

Founded more than 60 years ago, WSII is a specialty rental services market leader providing modular space and portable storage solutions to diverse end markets across North America. Operating through its branch network of over 90 locations in the United States, Canada and Mexico its 1,350 employees provide high quality, cost effective modular space and portable storage solutions to a diversified client base of approximately 25,000 customers. WSII’s products include single mobile and sales office units, multi-unit office complexes, classrooms, ground-level and stackable steel-frame office units, other specialty units, and shipping containers for portable storage solutions. These products are delivered “Ready To Work” with its growing offering of value-added products and services (“VAPS”), such as the rental of steps, ramps, furniture packages, damage waivers, and other amenities. These turnkey solutions offer customers flexible, low-cost, and timely solutions to meet their space needs on an outsourced basis, whether short, medium or long-term. WSII’s current modular space and portable storage lease fleet consists of over 34 million square feet of relocatable space, comprised of approximately 75,000 units. In addition to leasing, WSII offers both new and used units for sale and provides delivery, installation and other ancillary products and services.

 

Prior to the completion of the Business Combination, A/S Holdings completed a carve-out transaction (the “Carve-Out Transaction”) in which it transferred certain assets related to WSII’s historical remote accommodations business from WSII to other entities owned by A/S Holdings. To give effect to the impact of the Carve-Out Transaction and to differentiate the historical entity prior to the Carve-Out Transaction from the entity that participated in the business combination transaction, references to “WSII” herein refer to the entity and its consolidated subsidiaries prior to the Carve-Out Transaction, as represented by the historical financial statements and the notes thereto included elsewhere in this Current Report on Form 8-K.

 

TDR

 

Founded in 2002, TDR Capital LLP (“TDR Capital”) is a leading UK based private equity firm which manages funds with over €8 billion of committed capital. TDR Capital is an English Limited Liability Partnership authorized by the UK Financial Conduct Authority with registered number 216708 and acts as the manager of the TDR Investor. TDR Capital controls all of the TDR Investor’s voting rights in respect of its investments and no one else has equivalent control over the investments. Through certain of its directly and indirectly managed funds, TDR Capital manages investment funds which hold a majority interest in the Algeco Group which holds a minority interest in the Holdco Acquiror following the Business Combination.

 

The Business Combination will be accounted for as a reverse acquisition for which WSII has been determined to be the accounting acquirer based on the following factors:

 

·               WSII’s senior management comprises the senior management of the combined company;

 

·               TDR Capital designated four out of the seven initial members of our Board;

 



 

·             The controlling shareholder of the Algeco Group, TDR Capital, has the majority ownership of the combined company;

 

·               WSII comprises the ongoing operations of the combined company and is the larger of the two entities; and

 

·               Headquarters were moved to WSII.

 

Other factors that were considered are that Double Eagle will pay a purchase price consisting of a combination of cash and equity consideration and its shareholders have the largest voting rights. However, based on the aforementioned factors of management, board control, majority shareholder and size it was determined that the power to control WSII has not changed. Since WSII is determined to be the accounting acquirer in the reverse acquisition with Double Eagle, the accounting for the acquisition will be similar to that of a capital infusion as the only pre-combination asset of Double Eagle is cash held in the Trust Account. The assets and liabilities of Double Eagle will be carried at historical cost and WSII will not record any step-up in basis or any intangible assets or goodwill as a result of the business combination with Double Eagle. Operations prior to the Transaction will be those of WSII.

 

On November 29, 2017, Double Eagle, consummated Business Combination pursuant to the Stock Purchase Agreement. Under the Stock Purchase Agreement, the Holdco Acquiror purchased WSII for $1.1 billion (which amount is inclusive of the amounts required to pay third party and intercompany indebtedness at the closing of the Business Combination). The purchase price was financed using (i) $288.4 million in funds from Double Eagle’s trust account, after giving effect to (a) the redemption by Double Eagle shareholders of 21,128,456  of Double Eagle’s ordinary shares and (b) the payment of taxes payable, plus (ii) the proceeds from the private placement of 43,568,901 shares of our Class A common stock to the TDR Investor at a price of $9.60 per share, plus (iii) the net proceeds of $289.4 million from the offering by WSII of the Notes and (iv) a draw by WSII of $181 million under the ABL Facility. In addition, $78.5 million of the purchase price consideration was paid in the form of the Sellers’ Rollover Interest. The Sellers’ Rollover Interest represents a 10% equity interest in the Holdco Acquiror and is exchangeable for shares of our Class A common stock in accordance with the Exchange Agreement. We also issued to the Sellers one share of our Class B common stock, which are non-economic voting shares of the Company, for each share of the Holdco Acquiror issued, such that the voting interest represented by our Class B common stock will be commensurate with the equity interest in us represented by the Sellers’ Rollover Interest on an as-exchanged basis.

 

The following is the consideration paid and the shares outstanding as of the closing of the Business Combination:

 

Consideration (in thousands):

 

 

 

Pro Forma As Of
September 30, 2017

 

At Close
November 29, 2017

 

Cash paid to retire WSII outstanding debt

 

$

661,325

 

$

669,529

 

Cash paid to Algeco Group

 

360,174

 

351,720

 

Rollover equity

 

78,500

 

78,500

 

Total Consideration

 

$

1,100,000

 

$

1,100,000

 

 

 

 

Shares at Close
November 29, 2017s

 

Double Eagle public shares

 

28,575,873

 

Initial shares issued to the TDR Investor at $9.60 per share

 

43,568,901

 

Director shares

 

75,000

 

Total Shares at Closing

 

72,219,774

 

Algeco Group shares (Non-controlling interest)(1)

 

8,024,419

 

 


(1)      The Sellers received the Sellers’ Rollover Interest at closing and immediately thereafter, Algeco Scotsman Holdings Kft transferred its portion of the Sellers Rollover Interest to Algeco Scotsman Global S.à r.l. This interest is exchangeable for WSC Class A common stock at the exchange rate set forth in the Exchange Agreement.

 



 

Unaudited Pro Forma Condensed Combined Balance Sheet
as of September 30, 2017
(in thousands)

 

 

 

Historical as of

 

Pro Forma
Adjustments
for WSII

 

WSII As

 

Pro Forma
Adjustments for
Business

 

Pro Forma
Adjustments for

 

Pro Forma

 

 

 

September 30, 2017

 

Carve-out

 

Adjusted for

 

Combination

 

Financing

 

As Adjusted

 

 

 

DEAC

 

WSII

 

Note 1

 

Carve-Out

 

Adjustment

 

Note

 

Adjustment

 

Note

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13

 

$

10,816

 

$

(5,555

)

$

5,261

 

$

288,381

 

2

 

$

(661,325

)

10

 

$

130,418

 

 

 

 

 

 

 

 

 

 

 

(11,674

)

3

 

470,000

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

418,261

 

4

 

(18,326

)

12

 

 

 

 

 

 

 

 

 

 

 

 

 

(360,174

)

5

 

 

 

 

 

 

 

Trade receivables, net

 

 

104,619

 

(18,407

)

86,212

 

 

 

 

 

 

 

86,212

 

Inventories

 

 

8,520

 

(429

)

8,091

 

 

 

 

 

 

 

8,091

 

Prepaid expenses and other current assets

 

26

 

52,909

 

(43,529

)

9,380

 

 

 

 

 

 

 

9,406

 

Total current assets

 

39

 

176,864

 

(67,920

)

108,944

 

334,795

 

 

 

(209,651

)

 

 

234,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and investments held in Trust Account

 

500,829

 

 

 

 

(288,381

)

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(212,448

)

6

 

 

 

 

 

 

 

Rental equipment, net

 

 

1,013,863

 

(180,549

)

833,314

 

 

 

 

 

 

 

833,314

 

Other property, plant and equipment, net

 

 

86,242

 

(3,545

)

82,697

 

 

 

 

 

 

 

82,697

 

Notes due from affiliates

 

 

337,880

 

(337,880

)

 

 

 

 

 

 

 

 

Goodwill

 

 

61,226

 

 

61,226

 

 

 

 

 

 

 

61,226

 

Other intangible assets, net

 

 

150,375

 

(25,375

)

125,000

 

 

 

 

 

 

 

125,000

 

Other non-current assets

 

 

4,900

 

(2,500

)

2,400

 

 

 

 

 

 

 

2,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

500,868

 

$

1,831,350

 

$

(617,769

)

$

1,213,581

 

$

(166,034

)

 

 

$

(209,651

)

 

 

$

1,338,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,704

 

$

62,957

 

$

(6,687

)

$

56,270

 

$

 

 

 

$

(1,000

)

12

 

$

56,974

 

Advances from Sponsor

 

380

 

 

 

 

 

 

 

 

 

 

380

 

Accrued liabilities

 

 

51,556

 

(8,017

)

43,539

 

 

 

 

(811

)

12

 

42,728

 

Accrued interest

 

 

41,991

 

(40,610

)

1,381

 

 

 

 

 

 

 

1,381

 

Deferred revenue and customer deposits

 

 

54,065

 

(19,915

)

34,150

 

 

 

 

 

 

 

34,150

 

Current portion of long-term debt

 

 

669,576

 

(14,498

)

655,078

 

 

 

 

(653,199

)

10

 

1,879

 

Total current liabilities

 

2,084

 

880,145

 

(89,727

)

790,418

 

 

 

 

(655,010

)

 

 

137,492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

42,597

 

(5,613

)

36,984

 

 

 

 

 

 

 

 

506,984

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

470,000

 

11

 

 

 

Notes due to affiliates

 

 

756,591

 

(756,591

)

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

78,687

 

41,733

 

120,420

 

 

 

 

 

 

 

120,420

 

Deferred revenue and customer deposits

 

 

48,008

 

(43,300

)

4,708

 

 

 

 

 

 

 

4,708

 

Deferred underwriting compensation

 

19,500

 

 

 

 

(19,500

)

3

 

 

 

 

 

Other non-current liabilities

 

 

17,709

 

(4,694

)

13,015

 

 

 

 

 

 

 

13,015

 

Total liabilities

 

21,584

 

1,823,737

 

(858,192

)

965,545

 

(19,500

)

 

 

(185,010

)

 

 

782,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A Ordinary shares subject to possible redemption

 

474,284

 

 

 

 

(261,836

)

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(212,448

)

2

 

 

 

 

 

 

 

Shareholders’ Equity/Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

Class A ordinary shares

 

 

 

 

 

 

 

 

 

 

 

 

Class B ordinary shares

 

1

 

 

 

 

(1

)

7

 

 

 

 

 

Common stock

 

 

 

 

 

1

 

7

 

 

 

 

1

 

Additional paid-in capital

 

4,221

 

1,569,176

 

240,423

 

1,809,599

 

261,836

 

6

 

 

 

 

2,063,847

 

 

 

 

 

 

 

 

 

 

 

778

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

418,261

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(360,174

)

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(78,500

)

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,826

 

3

 

 

 

 

 

 

 

Accumulated other comprehensive loss

 

 

(48,014

)

 

(48,014

)

 

 

 

 

 

 

(48,014

)

Retained earnings/(accumulated deficit)

 

778

 

(1,513,549

)

 

(1,513,549

)

(778

)

8

 

(16,515

)

12

 

(1,538,190

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,126

)

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non controlling interest

 

 

 

 

 

78,500

 

9

 

 

 

 

78,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity/deficit

 

5,000

 

7,613

 

240,423

 

248,036

 

327,749

 

 

 

(24,641

)

 

 

556,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity/deficit

 

$

500,868

 

$

1,831,350

 

$

(617,769

)

$

1,213,581

 

$

(166,035

)

 

 

$

(209,651

)

 

 

$

1,338,763

 

 



 

Unaudited Pro Forma Condensed Statement of Operations for the
Period Ended September 30, 2017
(in thousands, except shares and per share data)

 

 

 

Nine Months
Ended
September 30,
2017

 

Nine Months
Ended
September
30, 2017

 

Pro Forma
Adjustments for WSII
Carve-Out

 

As Adjusted
for WSII

 

Pro Forma
Adjustments for
Business
Combination

 

Pro Forma
Adjustments for
Financing

 

Pro Forma As

 

 

 

DEAC

 

WSII

 

Adjustment

 

Note

 

Carve-Out

 

Adjustment

 

Note

 

Adjustment

 

Note

 

Adjusted *

 

 

 

 

 

 

 

Note A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing and services revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Modular space leasing

 

$

 

$

217,261

 

$

450

 

 

 

$

217,711

 

$

 

 

 

$

 

 

 

$

217,711

 

Modular space delivery and installation

 

 

66,580

 

3

 

 

 

66,583

 

 

 

 

 

 

 

66,583

 

Remote accommodations

 

 

95,332

 

(95,332

)

 

 

 

 

 

 

 

 

 

 

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New units

 

 

24,491

 

 

 

 

24,491

 

 

 

 

 

 

 

24,491

 

Rental units

 

 

18,750

 

(1,441

)

 

 

17,309

 

 

 

 

 

 

 

17,309

 

Total revenues

 

 

422,414

 

(96,320

)

 

 

326,094

 

 

 

 

 

 

 

326,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of leasing and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Modular space leasing

 

 

61,694

 

 

 

 

61,694

 

 

 

 

 

 

 

61,694

 

Modular space delivery and installation

 

 

64,404

 

 

 

 

64,404

 

 

 

 

 

 

 

64,404

 

Remote accommodations

 

 

41,359

 

(41,359

)

 

 

 

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New units

 

 

17,402

 

10

 

 

 

17,412

 

 

 

 

 

 

 

17,412

 

Rental units

 

 

10,952

 

(885

)

 

 

10,067

 

 

 

 

 

 

 

10,067

 

Depreciation of rental equipment

 

 

71,398

 

(18,195

)

 

 

53,203

 

 

 

 

 

 

 

53,203

 

Gross profit

 

 

155,205

 

(35,891

)

 

 

119,314

 

 

 

 

 

 

 

119,314

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

2,230

 

110,348

 

(9,838

)

 

 

100,510

 

(3,174

)

C

 

 

 

 

99,566

 

Other depreciation and amortization

 

 

9,499

 

(3,763

)

 

 

5,736

 

 

 

 

 

 

 

5,736

 

Restructuring costs

 

 

3,697

 

(1,573

)

 

 

2,124

 

 

 

 

 

 

 

2,124

 

Currency (gains) losses, net

 

 

(12,875

)

10,670

 

 

 

(2,205

)

 

 

 

 

 

 

(2,205

)

Other expense, net

 

 

1,602

 

(344

)

 

 

1,258

 

 

 

 

 

 

 

1,258

 

Operating (loss) profit

 

(2,230

)

42,934

 

(31,043

)

 

 

11,891

 

3,174

 

 

 

 

 

 

12,835

 

Interest expense

 

 

86,748

 

(60,553

)

 

 

26,195

 

 

 

 

(23,220

)

E

 

30,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,344

 

F

 

 

 

Interest income

 

(2,466

)

(9,752

)

9,752

 

 

 

 

 

 

 

 

 

 

(2,466

)

Income (loss) before income tax

 

236

 

(34,062

)

19,758

 

 

 

(14,304

)

3,174

 

 

 

(4,124

)

 

 

(15,018

)

Income tax (benefit) expense

 

 

(9,630

)

7,508

 

B

 

(2,122

)

1,206

 

D

 

(1,567

)

G

 

(2,483

)

Net income (loss)

 

$

236

 

$

(24,432

)

$

12,250

 

 

 

$

(12,182

)

$

1,968

 

 

 

$

(2,557

)

 

 

$

(12,535

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

14,717,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

72,219,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

62,204,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

72,219,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(0.16

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(0.16

)

 



 

Unaudited Pro Forma Condensed Statement of Operations for the
Year Ended December 31, 2016
(in thousands, except shares and per share data)

 

P&L Pro Forma

Unaudited Pro Forma Combined Financial Data

 

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2016

(in thousands)

 

 

 

Fiscal Year
Ended
December
31, 2016

 

Fiscal
Year
Ended
December
31, 2016

 

Pro Forma
Adjustments for
WSII Carve-Out

 

As
Adjusted
for WSII

 

Pro Forma
Adjustments for
Financing

 

Pro Forma
As Adjusted

 

 

 

DEAC

 

WSII

 

Adjustment

 

Note

 

Carve-Out

 

Adjustment

 

Note

 

*

 

 

 

 

 

 

 

Note A

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing and services revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Modular space leasing

 

$

 

$

283,550

 

$

593

 

 

 

$

284,143

 

$

 

 

 

$

284,143

 

Modular space delivery and installation

 

 

81,892

 

153

 

 

 

82,045

 

 

 

 

82,045

 

Remote accommodations

 

 

149,467

 

(149,467

)

 

 

 

 

 

 

 

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New units

 

 

39,228

 

 

 

 

39,228

 

 

 

 

39,228

 

Rental units

 

 

21,942

 

142

 

 

 

22,084

 

 

 

 

22,084

 

Total revenues

 

 

576,079

 

(148,579

)

 

 

427,500

 

 

 

 

427,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of leasing and services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Modular space leasing

 

 

75,516

 

 

 

 

75,516

 

 

 

 

75,516

 

Modular space delivery and installation

 

 

75,359

 

 

 

 

75,359

 

 

 

 

75,359

 

Remote accommodations

 

 

51,145

 

(51,145

)

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New units

 

 

27,669

 

3

 

 

 

27,672

 

 

 

 

27,672

 

Rental units

 

 

10,894

 

 

 

 

10,894

 

 

 

 

10,894

 

Depreciation of rental equipment

 

 

105,281

 

(36,300

)

 

 

68,981

 

 

 

 

68,981

 

Gross profit

 

 

230,215

 

(61,137

)

 

 

169,078

 

 

 

 

169,078

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

689

 

152,976

 

(13,883

)

 

 

139,093

 

 

 

 

139,782

 

Other depreciation and amortization

 

 

14,048

 

(5,029

)

 

 

9,019

 

 

 

 

9,019

 

Impairment losses on goodwill

 

 

5,532

 

 

 

 

5,532

 

 

 

 

5,532

 

Impairment losses on rental equipment

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs

 

 

2,810

 

 

 

 

2,810

 

 

 

 

2,810

 

Currency losses, net

 

 

13,098

 

(11,276

)

 

 

1,822

 

 

 

 

1,822

 

Change in fair value of contingent consideration

 

 

(4,581

)

4,581

 

 

 

 

 

 

 

 

Other expense, net

 

 

1,437

 

(1,047

)

 

 

390

 

 

 

 

390

 

Operating (loss) profit

 

(689

)

44,895

 

(34,483

)

 

 

10,412

 

 

 

 

9,723

 

Interest expense

 

 

97,017

 

(72,228

)

 

 

24,789

 

(23,840

)

D

 

37,428

 

 

 

 

 

 

 

 

 

 

 

 

 

36,479

 

E

 

 

 

Interest income

 

(1,251

)

(10,228

)

10,228

 

 

 

 

 

 

 

 

(1,251

)

Income (loss) before income tax

 

(689

)

(41,894

)

27,517

 

 

 

(14,377

)

(12,639

)

 

 

(26,454

)

Income tax (benefit) expense

 

 

(10,958

)

10,456

 

B

 

(502

)

(4,803

)

F

 

(5,305

)

Net Income (loss)

 

$

(689

)

$

(30,936

)

$

17,061

 

 

 

$

(13,875

)

$

(7,836

)

 

 

$

(21,150

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

14,845,629

 

 

 

 

 

 

 

 

 

 

 

 

 

72,219,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

62,500,000

 

 

 

 

 

 

 

 

 

 

 

 

 

72,219,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(0.26

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(0.26

)

 



 

Unaudited Pro Forma Condensed Statement of Operations for the
Year Ended December 31, 2015
(in thousands)

 

 

 

Fiscal Year
Ended
December 31,
2015

 

Discontinued
Operations
Pro Forma
Adjustments
for WSII

 

Pro Forma

 

 

 

WSII

 

Adjustment

 

WSII

 

 

 

 

 

Note H

 

 

 

Revenues

 

 

 

 

 

 

 

Leasing and services revenue:

 

 

 

 

 

 

 

Modular leasing

 

$

300,212

 

$

701

 

$

300,913

 

Modular delivery and installation

 

83,103

 

 

 

83,103

 

Remote accommodations

 

181,692

 

(181,692

)

 

Sales:

 

 

 

 

 

 

 

New units

 

54,359

 

 

 

54,359

 

Rental units

 

15,661

 

 

 

15,661

 

Total revenues

 

635,027

 

(180,991

)

454,036

 

Costs

 

 

 

 

 

 

 

Cost of leasing and services:

 

 

 

 

 

 

 

Modular leasing

 

80,081

 

 

 

80,081

 

Modular delivery and installation

 

77,960

 

 

 

77,960

 

Remote accommodations

 

73,106

 

(73,106

)

 

Cost of sales:

 

 

 

 

 

 

 

New units

 

43,626

 

59

 

43,685

 

Rental units

 

10,255

 

 

 

10,255

 

Depreciation of rental equipment

 

108,024

 

(29,551

)

78,473

 

Gross profit

 

241,975

 

(78,393

)

163,582

 

Expenses

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

152,452

 

(13,375

)

139,077

 

Other depreciation and amortization

 

28,868

 

(6,193

)

22,675

 

Impairment losses on goodwill

 

115,940

 

(115,940

)

 

Impairment losses on intangibles

 

2,900

 

(2,900

)

 

Restructuring costs

 

9,185

 

 

9,185

 

Currency losses, net

 

12,122

 

(814

)

11,308

 

Change in fair value of contingent consideration

 

(50,500

)

50,500

 

 

Other expense, net

 

1,160

 

29

 

1,189

 

Operating (loss) profit

 

(30,152

)

10,300

 

(19,852

)

Interest expense

 

92,817

 

(789

)

92,028

 

Interest income

 

(9,778

)

 

(9,778

)

Income (loss) before income tax

 

(113,191

)

11,089

 

(102,102

)

Income tax (benefit) expense

 

(41,604

)

4,214

 

(37,390

)

Net income (loss)

 

$

(71,587

)

$

6,875

 

$

(64,712

)

 



 

Unaudited Pro Forma Condensed Statement of Operations for the
Year Ended December 31, 2014
(in thousands)

 

 

 

Fiscal Year
Ended
December 31,
2014

 

Discontinued
Operations
Pro Forma
Adjustments
for WSII

 

Pro Forma

 

 

 

WSII

 

Adjustment

 

WSII

 

 

 

 

 

Note H

 

 

 

Revenues

 

 

 

 

 

 

 

Leasing and services revenue:

 

 

 

 

 

 

 

Modular leasing

 

$

308,888

 

$

449

 

$

309,337

 

Modular delivery and installation

 

83,364

 

 

 

83,364

 

Remote accommodations

 

139,468

 

(139,468

)

 

Sales:

 

 

 

 

 

 

 

New units

 

87,874

 

 

 

87,874

 

Rental units

 

24,825

 

 

24,825

 

Total revenues

 

644,419

 

(139,019

)

505,400

 

Costs

 

 

 

 

 

 

 

Cost of leasing and services:

 

 

 

 

 

 

 

Modular leasing

 

78,864

 

 

78,864

 

Modular delivery and installation

 

73,670

 

 

73,670

 

Remote accommodations

 

67,368

 

(67,368

)

 

Cost of sales:

 

 

 

 

 

 

 

New units

 

69,312

 

(27

)

69,285

 

Rental units

 

16,760

 

1

 

16,761

 

Depreciation of rental equipment

 

89,597

 

(21,628

)

67,969

 

Gross profit

 

248,848

 

(49,997

)

198,851

 

Expenses

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

161,966

 

(16,410

)

145,556

 

Other depreciation and amortization

 

32,821

 

(6,558

)

26,263

 

Impairment losses on goodwill

 

 

 

 

Impairment losses on rental equipment

 

2,849

 

 

2,849

 

Restructuring costs

 

681

 

 

681

 

Currency losses, net

 

17,557

 

(1,802

)

15,755

 

Change in fair value of contingent consideration

 

48,515

 

(48,515

)

 

Other expense, net

 

1,002

 

 

1,002

 

Operating (loss) profit

 

(16,543

)

23,288

 

6,745

 

Interest expense

 

92,446

 

(1,740

)

90,706

 

Interest income

 

(9,529

)

 

(9,529

)

Loss on extinguishment of debt

 

2,324

 

(2,324

)

 

Income (loss) before income tax

 

(101,784

)

27,352

 

(74,432

)

Income tax (benefit) expense

 

(13,177

)

10,394

 

(2,783

)

Net income (loss)

 

$

(88,607

)

$

16,958

 

$

(71,649

)

 



 

Basis of Pro Forma Presentation

 

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2017 and the year ended December 31, 2016 gives pro forma effect to the Business Combination and the related financing transactions as if they had occurred on January 1, 2016. The unaudited pro forma condensed combined statements of operations for the years ended December 31, 2015 and 2014 give pro forma effect to the impact of the Carve-Out Transaction as if it had occurred as of January 1, 2014. The unaudited pro forma condensed combined balance sheet as of September 30, 2017 assumes that the Business Combination and the related financing transactions were completed on September 30, 2017.

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2017 has been prepared using, and should be read in conjunction with, the following:

 

·                  Double Eagle’s unaudited condensed interim balance sheet as of September 30, 2017 included elsewhere in this Current Report on Form 8-K; and

·                  WSII’s unaudited condensed consolidated interim balance sheet as of September 30, 2017 included elsewhere in the Current Report on Form 8-K.

 

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2017 has been prepared using the following:

 

·                  Double Eagle’s unaudited condensed interim statement of operations for the nine month ended September 30, 2017 included elsewhere in this Current Report on Form 8-K; and

·                  WSII’s unaudited condensed consolidated statement of operations for the nine month ended September 30, 2017 included elsewhere in this Current Report on Form 8-K.

 

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2016 has been prepared using the following:

 

·                  Double Eagle’s audited statement of operations for the year ended December 31, 2016 included elsewhere in this Current Report on Form 8-K; and

·                  WSII’s audited consolidated statement of operations for the year ended December 31, 2016 included elsewhere in this Current Report on Form 8-K.

 

The unaudited pro forma condensed combined statements of operations for the years ended December 31, 2015 and 2014 have been prepared using the following:

 

·                  WSII’s audited consolidated statement of operations for the years ended December 31, 2015 and 2014 included elsewhere in this Current Report on Form 8-K.

 

Under ASC 805, acquisition-related costs such as advisory, legal, valuation and other professional fees in connection with the Business Combination are expensed. Double Eagle incurred total acquisition-related costs of $50.0 million, which includes debt issuance costs of $20.0 million (reflected below in Note 11), and transaction costs of $30.0 million (reflected below in Note 3 and Note 12). The unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the Business Combination.

 

The unaudited pro forma condensed combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination and related transactions taken place on the dates indicated, nor do they purport to project our future consolidated results of operations or financial position. They should be read in conjunction with the historical consolidated financial statements and notes thereto of Double Eagle and WSII.

 

The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are (1) directly attributable to the Business Combination, (2) factually supportable, and (3) with respect to the statement of operations, expected to have a continuing impact on our results.

 

There were no significant intercompany balances or transactions between Double Eagle and WSII as of the date and for the period of these unaudited pro forma combined financial statements.

 

The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the Double Eagle and WSII filed consolidated income tax returns during the period presented.

 



 

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of Double Eagle’s shares outstanding, assuming the business combination and related transactions occurred on January 1, 2016.

 

As the unaudited pro forma condensed statements of operations are in a loss position, anti-dilutive instruments (warrants, founder shares, Algeco Group shares issuable upon exchange of Holdco Acquiror shares) were not included in the diluted per share calculations.

 

Pro Forma Weighted Average Shares (Basic and Diluted)

 

 

 

Shares at Close
November 29, 2017

 

Double Eagle public share

 

28,575,873

 

Initial shares issued to the TDR Investor at $9.60 per share

 

43,568,901

 

Director shares

 

75,000

 

Pro Forma Weighted Average Shares (Basic and Diluted)

 

72,219,774

 

 

Pro forma Basic Loss Per Share (in thousands except per share and share data)

 

Nine Months Ended
September 30, 2017

 

Pro forma net loss

 

$

(12,535

)

Noncontrolling interest

 

(1,254

)

Loss attributable to common shareholders

 

$

(11,281

)

Basic Weighted Average Shares Outstanding

 

72,219,774

 

Pro Forma Basic and Diluted Loss Per Share

 

$

(0.16

) 

 

Pro forma Basic Loss Per Share (in thousands except per share and share data)

 

Fiscal Year Ended
December 31, 2016

 

Pro forma net loss

 

$

(21,1540

)

Noncontrolling interest

 

(2,115

)

Loss attributable to common shareholders

 

$

(19,035

)

Basic Weighted Average Shares Outstanding

 

72,219,774

 

Pro Forma Basic and Diluted Loss Per Share

 

$

(0.26

) 

 

Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

 

Carve-out Adjustments

 

Note 1  Reflects the adjustments to exclude the assets and liabilities of the remote accommodations business of WSII that will be retained by the Algeco Group and which are excluded from the Business Combination, and the elimination of all amounts due by WSII and due from WSII to entities within the Algeco Group that are not part of the business combination. These amounts were settled as part of the Carve-Out Transaction or repaid with cash to the Sellers reflected in Note 5.

 

Business Combination Adjustments

 

Note 2  Reflects $288.4  million of cash and cash equivalents held in the Double Eagle trust account that was used for transaction consideration.

 

Note 3  Reflects the settlement of $19.5 million of deferred underwriters’ fees incurred as part of Double Eagle’s IPO that were committed to be paid upon the consummation of a business combination. Management estimates that the actual cash settlement amount will be approximately $11.7 million.

 



 

Note 4  Reflects the cash equity contribution by TDR of $418.3 million.

 

Note 5  Reflects the cash consideration of $360.2 million to be paid to the Sellers.

 

Note 6  Reflects the redemption of 21,128,456 of Double Eagle’s Class A Ordinary shares redeemed by Double Eagle’s shareholders for $212.4 million from “Cash and investments held in Trust Account” and use of remaining funds in the Transaction of $288.4 million. Class A Ordinary shares of Double Eagle that were not redeemed were rolled over into Class A shares of our common stock.

 

Note 7  Reflects the reclassification of Double Eagle’s 12,500,000 “Class B Ordinary shares” into shares of Double Eagle’s Class A Ordinary Shares and then to shares of our Class A common stock.

 

Note 8  Elimination of Double Eagle’s historical retained earnings.

 

Note 9  Represents a 10.0% minority interest retained by the Algeco Group.

 

Financing Adjustments

 

Note 10  Reflects the repayment of $661.3 million of WSII’s existing asset based credit facility in cash at closing. The book value of WSII existing debt expected to be repaid is $653.2 million with $8.1 million of associated deferred financing fees. The $8.1 million of deferred financing fees are eliminated through retained earnings/(accumulated deficit). The eliminated deferred financing fees are not expected to have a continuing impact on the combined results and are not reflected in the pro forma condensed combined statements of operations. Williams Scotsman has $38.9 million of capital leases and other debt which remain obligations after the business combination.

 

Note 11  Reflects the new debt facilities comprised of a $600.0 million asset based revolving credit facility and $300.0 million of Notes issued, net of debt issuance costs of $20.0 million. The revolving credit facility was drawn by $190.0 million at closing.

 

The following table details the debt facilities as reflected in the pro forma condensed combined balance sheet as of September 30, 2017:

 

 

 

Principal
Outstanding

 

Stated
Interest
rate

 

Deferred
Financing
Cost

 

Net
Proceeds

 

Term

 

Current
Portion of
Long-
Term
Debt

 

Long-Term
Debt

 

 

 

 

 

 

 

 

 

(in
thousands)

 

 

 

 

 

 

 

Revolving Credit Facility

 

$

190,000

 

Libor + 2.50%

 

$

9,000

 

$

181,000

 

4.5 years

 

$

0

 

$

181,000

 

Senior Secured Bridge Facility

 

$

300,000

 

7.875%

 

$

11,000

 

$

289,000

 

5.0 years

 

$

0

 

$

289,000

 

 

 

$

490,000

 

 

 

$

20,000

 

$

470,000

 

 

 

$

0

 

$

470,000

 

 

For the Revolving Credit Facility, there is a fee of 0.375% on the unused portion.

 

Pro forma debt as of September 30, 2017 is comprised of the following (in thousands):

 

Debt facilities

 

$

490,000

 

Deferred financing costs

 

(20,000

)

Capital leases and other debt

 

38,862

 

Total debt

 

508,862

 

Less: current portion

 

(1,879

)

Long-term debt

 

$

506,983

 

 

Note 12  Represents estimated transaction costs of $18.3 million in consummating the business combination. The transaction costs are not expected to have a continuing impact on the combined results and are not reflected in the pro forma results of operations.

 



 

Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations

 

The pro forma adjustments included in the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2017 and the years ended December 31, 2016, 2015 and 2014 are as follows:

 

Note A   Reflects Carve-Out Transaction adjustments to exclude the results of operations related to the remote accommodations business, which were excluded from the Business Combination. The Carve-Out adjustment for currency (gains) losses, net, interest income, interest expense and other expense, net assumes that amounts related to borrowings between WSII and other Algeco Scotsman companies which were  repaid or contributed as part of the transaction structuring do not exist. Included in the pro forma selling, general and administrative costs are $15.7 million and $29.2 million of Algeco Group corporate costs for the nine months ended September 30, 2017 and twelve months ended December 31, 2016, respectively, which are not anticipated to be part of the ongoing costs of Williams Scotsman. The Carve-Out Transaction adjustment for currency (gains) losses, net, interest income and interest expense and other expense, net assumes that amounts related to borrowings between Williams Scotsman and other Algeco Scotsman companies which were repaid or contributed as part of the transaction structuring do not exist.

 

Note B  Reflects adjustment for tax provision adjustment at a statutory rate of 38.0% related to the operations that will be excluded from the business combination.

 

Business Combination Adjustments

 

Note C  Represents the elimination of non-recurring transaction costs included within the historical results of WSII.

 

Note D   Represents adjustment for tax provision adjustment at a statutory rate of 38.0% related to Note C.

 

Financing

 

Note E  Represents the elimination of the historical interest expense associated with debt instruments that were repaid as part of the business combination as described in Note 10.

 

Note F  Represents interest expense net of amortized deferred financing costs to be incurred related to the new debt to be incurred as described in Note 11.  For pro forma purposes, the interest expense adjustments have been calculated using the effective interest method. A sensitivity analysis on interest expense for the nine months ended September 30, 2017 and the year ended December 31, 2016 has been performed to assess the effect of a change of 0.125% of the hypothetical interest rate would have on the new revolving credit facility. The increase in interest expense following the hypothetical change in the interest rate of 0.125% for the pro forma condensed combined statements of operations for the nine months ended September 30, 2017 would be approximately $0.2 million assuming a constant draw of $190.0 million on the revolving credit facility. The increase in interest expense following the hypothetical change in the interest rate of 0.125% for the pro forma condensed combined statements of operations for the year ended December 31, 2016 would be approximately $0.2 million assuming a constant draw of $190.0 million on the revolving credit facility.

 

Note G  Reflects adjustment for tax provision adjustment at a statutory rate of 38.0% related to the Financing.

 

Note H  Reflects adjustments to exclude the results of operations related to certain businesses that provide workforce housing solutions in remote areas included in the historical WSII financial statements that will be retained by the Algeco Group.  Carve-out adjustments for revenues, direct costs, selling, general and administrative expenses and other depreciation and amortization are consistent with the remote accommodations balances per the segment footnote in the WSII financial statements and the notes related thereto included elsewhere in this Current Report on Form 8-K. Carve-out adjustments for the remainder of the operating expenses are consistent with the remote accommodations balances per WSII’s internal financial data for the remote accommodations business.  Carve-out adjustments for currency losses, net and interest expense assume that amounts related to third party borrowings by the remote accommodations business do not exist.