Attached files
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 Companys 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. WSIIs 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. WSIIs 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 WSIIs 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 Investors 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:
· WSIIs 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 Eagles trust account, after giving effect to (a) the redemption by Double Eagle shareholders of 21,128,456 of Double Eagles 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 |
|
At Close |
| ||
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 |
|
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 |
|
WSII As |
|
Pro Forma |
|
Pro Forma |
|
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 |
|
Nine Months |
|
Pro Forma |
|
As Adjusted |
|
Pro Forma |
|
Pro Forma |
|
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 |
|
Fiscal |
|
Pro Forma |
|
As |
|
Pro Forma |
|
Pro Forma |
| ||||||||||
|
|
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 |
|
Discontinued |
|
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 |
|
Discontinued |
|
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 Eagles unaudited condensed interim balance sheet as of September 30, 2017 included elsewhere in this Current Report on Form 8-K; and
· WSIIs 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 Eagles 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
· WSIIs 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 Eagles audited statement of operations for the year ended December 31, 2016 included elsewhere in this Current Report on Form 8-K; and
· WSIIs 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:
· WSIIs 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 Eagles 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 |
|
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 |
| |
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 |
| |
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 Eagles 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 Eagles Class A Ordinary shares redeemed by Double Eagles 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 Eagles 12,500,000 Class B Ordinary shares into shares of Double Eagles Class A Ordinary Shares and then to shares of our Class A common stock.
Note 8 Elimination of Double Eagles 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 WSIIs 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 |
|
Stated |
|
Deferred |
|
Net |
|
Term |
|
Current |
|
Long-Term |
| |||||
|
|
|
|
|
|
|
|
(in |
|
|
|
|
|
|
| |||||
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 WSIIs 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.