Mobile Mini, Inc. Announces Agreement to Merge with Mobile Storage Group

Business Wire, Feb 22, 2008

Also Reports Fourth Quarter Results

TEMPE, Ariz. -- Mobile Mini, Inc. (Nasdaq GS: MINI), the leading provider of portable storage solutions, and Mobile Storage Group, Inc. of Glendale, California, a provider of portable storage in the United States and the United Kingdom, today announced that they have entered into a definitive merger agreement. Under the terms of the agreement, Mobile Storage Group will merge into Mobile Mini in a transaction valued at approximately $701.5 million.

The transaction will establish the combined company as a leading global provider of portable storage solutions in the US and the UK. Upon consummation of the merger, Mobile Mini will significantly expand its geographic footprint and will be positioned to cover most major markets for portable storage in both the US and the UK.

"This represents a highly strategic transaction for Mobile Mini," stated Mobile Mini's Chairman, President & Chief Executive Officer, Steven Bunger, "which substantially increases Mobile Mini's ability to service an expanded customer base, provides the employees of both companies with enhanced career opportunities, and offers our stockholders an opportunity to benefit from a transaction that we believe will be solidly accretive to our earnings in the first full year of the combination."

The merged company will include senior executives from both companies. Steve Bunger will serve as Chairman, President and Chief Executive Officer and Larry Trachtenberg will continue as Chief Financial Officer. Doug Waugaman, CEO of Mobile Storage Group, will join Mobile Mini as COO of Integration, reporting directly to Mr. Bunger. Jody Miller, Bill Armstead and Ron Halchishak, senior executives at Mobile Storage Group, will also assume senior roles with the combined organization. Mr. Bunger stated, "A key goal of this merger is to retain the top sales professionals, branch managers and operating field personnel of the combined organizations, both in the US and the UK, to position Mobile Mini with the most knowledgeable, experienced and motivated employee base in the portable storage industry." Mr Waugaman added, "This merger is predicated on bringing together the best in class employees of our two organizations and I am excited by the expanded opportunities to be offered to much of our talented employee base."

Mobile Storage Group is majority owned by the private equity firm Welsh, Carson, Anderson & Stowe (WCAS), who, together with the other equity holders, through this transaction, will be converting substantially all of their equity ownership of Mobile Storage group into Mobile Mini preferred stock. Following consummation of the merger, two WCAS representatives will be elected to Mobile Mini's Board of Directors. WCAS is one of the largest private equity investors in the US focused on the information & business services and healthcare industries. Since its founding in 1979, WCAS has organized 14 investment partnerships with total capital in excess of $16 billion.

Pursuant to the merger, Mobile Mini will assume approximately $535.0 million of Mobile Storage Group's outstanding indebtedness and will acquire all outstanding shares of Mobile Storage Group for $12.5 million in cash and shares of newly issued Mobile Mini convertible preferred stock with a liquidation preference of $154.0 million. The convertible preferred stock will be convertible into approximately 8.55 million Mobile Mini common shares, representing a conversion price of $18.00 per Mobile Mini share and resulting in fully diluted ownership in Mobile Mini of approximately 19.8% for Mobile Storage Group stockholders. The preferred stock will be mandatorily convertible into Mobile Mini common stock if, after the first year following the issuance of the preferred stock, Mobile Mini's common stock trades above $23.00 share for a period of 30 consecutive days. The preferred stock will not have any cash or payment-in-kind dividends, will impose no covenants upon Mobile Mini, and will include an optional redemption feature following the tenth year after the issue date.

The merger is expected to generate cost synergies of at least $25 million on an annualized basis, which are expected to be fully realized by the end of fiscal 2009. The cost synergies are a result of the significant overlap in corporate functions and branch infrastructure. Mobile Mini believes that the combination with Mobile Storage will add 21 new locations in the US and 14 locations in the UK. This combination of new branches as well as proximate locations offers opportunities for both additional growth and substantial cost synergies via branch consolidation.

The transaction is expected to be slightly accretive to earnings in 2008 (excluding merger-related expenses), and should generate substantial EPS accretion of 25% or more, over current analyst EPS estimates, in 2009, including the benefit of expected synergies. Mr. Bunger stated, "As the integration of our companies is executed, we expect to achieve meaningful cost synergies by combining certain overlapping branch locations, consolidating corporate functions and headquarters and reducing certain combined operating expenses, which we estimate will ultimately generate a minimum of $25 million of savings on an annualized basis. These cost synergies, in combination with an improved revenue growth potential through implementing Mobile Mini's growth model into newly acquired Mobile Storage Group branches, should add to Mobile Mini's future earnings growth."