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WillScot Mobile Mini (WSC) - Eliminates The Biggest Risk By Acquiring McGrath For $3.8B
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Thesis Tracker

WillScot Mobile Mini (WSC) - Eliminates The Biggest Risk By Acquiring McGrath For $3.8B

Cementing market dominance, financial implications, intangible benefits, good time to buy?

Trung Nguyen @SWIs's avatar
Trung Nguyen @SWIs
Jan 29, 2024
∙ Paid
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Sleep Well Investments
WillScot Mobile Mini (WSC) - Eliminates The Biggest Risk By Acquiring McGrath For $3.8B
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Hi, I am Trung. I write 10K+ words deep-dives on market leaders. I also write Thesis Trackers updates to follow up on their performance. When the right price comes, I buy them for the Sleep Well Portfolio, which I am building for my 4-year-old daughter to redeem in 2037. I disclose the reasoning of all BUY and SELL (ideally never) transactions (1st, 2nd, 3rd, 4th). Join me in building generational wealth.


Hi, 2000+ sleep well investors,

I deep-dived into WillScot Mobile Mini (WSC) in November 2023 (Part 1, Part 2). It was the 9th Sleep Well pick with a 12.5/20 Sleep Well score.

Sleep Well Investments Score (25 Jan 2024)

Links to all deep dive here

The thesis for owning WSC was simple:

  • WSC is five times the size of the next competitor in a $10B+ market,

  • Has products with 25%+ IRR over a 30-year asset life span,

  • Has a counter-cyclical capex and working capital profile,

  • Management is proactive in value creation.

WSC has the best unit economics and has clear organic and inorganic growth opportunities (it acquired 25 businesses in 2017). The stock returned 25% CAGR since its IPO in 2017.

In the deep dive, I highlighted that the biggest near-term risk to WSC was McGrath RentCorp (MGRC), as it competes aggressively in M&A deals and operates the industry's second-largest modular business - behind WSC. I also highlighted the biggest long-term risks: United Rentals (URI), Ashtead (AHT), and Herc Holdings (HRI).

Today, 29th Jan 2024, WillScot has announced it will acquire McGrath for $3.8B, cementing the leadership position and eliminating the biggest near-term risk to its existence.

I will dive into the details of the M&A deal, analyze the business and financial implications, perform a post-acquisition valuation, and set a new plan to own the business.

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