McGrath RentCorp to acquire Design Space modular buildings


McGrath RentCorp today announced that it has entered into a definitive agreement under which it will acquire Design Space Modular Buildings PNW, LP (“Design Space”), for a cash purchase price of $ 260 million, subject to some adjustments. The transaction is expected to be accretive to EPS and free cash flow at closing.

Design Space is a leading supplier of modular buildings and portable storage in the western United States. Its network of 15 branches and over 100 employees serves a variety of end markets including construction, government, education and commerce.

As of December 31, 2020, on a 12-month basis, Design Space generated $ 32 million in EBITDA out of $ 81 million in total revenue. As of March 31, 2021, Design Space’s rental fleet consisted of approximately 6,400 units at an initial cost of approximately $ 140 million.


  • Expands the geographic coverage of McGrath RentCorp’s Mobile Modular division across the Western United States with the immediate addition of 15 branches in 8 states.

  • Joined the common commitment of Design Space and Mobile Modular for superior customer service and a high quality fleet.

  • Positions for longer term revenue growth synergies through combined sales resources and new fleet capital investments in growing markets.

  • Creates operational cost reduction opportunities through combined fleet optimization in California.

  • The purchase price represents a multiple of 8.1 times 12-month EBITDA.

  • McGrath RentCorp expects to fund the transaction from existing capacity under its revolving credit facility.

  • The transaction is expected to close in the second quarter of 2021.

“The acquisition of Design Space is very complementary to our modular building rental business,” said Joe Hanna, President and CEO of McGrath RentCorp. “This strategic initiative accelerates our expansion into new attractive geographies. With our available capital and our combined business and operational resources, we look forward to building on the success of Design Space and achieving future growth together. Design Space has a strong, dedicated and experienced team. We are delighted to welcome the new members of our team as an important part of our future. “


Kirkland & Ellis LLP acted as legal counsel to McGrath RentCorp in the transaction, and Jackson Walker LLP acted as legal counsel to Design Space.


McGrath RentCorp will host a conference call tomorrow, May 14, 2021 at 8:00 a.m. Eastern Time (5:00 a.m. PT) to discuss the acquisition of Design Space. To join the conference call, dial 1-844-707-0666 (in the US) or 1-703-639-1220 (outside the US), or to listen only, access the simultaneous webcast at the Investor Relations section of the Company’s website at A replay will be available for 7 days after the call by dialing 1-855-859-2056 (within the US) or 1-404-537-3406 (outside the US). The access code for the replay of the conference call is 3693916. Additionally, a live audio webcast and replay of the call can be found in the investor relations section of the company’s website at the next address:


Founded in 1979, McGrath RentCorp (Nasdaq: MGRC) is a diversified business-to-business rental company providing modular buildings, electronic test equipment, portable storage and tank containment solutions in the United States and other regions. from North America. The company’s rental business is made up of four divisions: Mobile Modular rents and sells modular buildings to meet clients’ temporary and permanent needs for classroom and office space; TRS-RenTelco rents and sells electronic test equipment; Adler Tank Rentals rents and sells containment solutions for hazardous and non-hazardous liquids and solids; and mobile modular portable storage provides portable storage rental solutions. For more information about McGrath RentCorp and its business units, please visit our websites:

Business –
Modular buildings –
Electronic test equipment –
Tanks and boxes –
Portable storage –
Manufacturing of school facilities –


Design space –

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as PSLRA. Forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These statements are based on current plans, estimates and projections and, therefore, you should not place undue reliance on them. No forward-looking statement, including any such statement regarding the expected realization and benefits of the proposed transaction, can be guaranteed, and actual results may differ materially from those projected. Forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections regarding the business and future financial results of the equipment rental industries, and other legal developments. , regulatory and economic. The company and Design Space use words such as “anticipates”, “believes”, “plans”, “expects”, “projects”, “future”, “intends”, “may”, “will”, ” should “,” could, “” estimate “,” anticipate “,” potential “,” continue “,” guide “and similar expressions to identify those forward-looking statements which are intended to be covered by the safe harbor provisions of the PSSRA Actual results could differ materially from the results contemplated by such forward-looking statements due to a number of factors, including, but not limited to, those described in SEC reports filed by the Company, as well as the possibility that (1) the transaction may not be completed in a timely manner or not at all, which may adversely affect the price of the Company’s securities; (2) the duration of the COVID-19 pandemic, its economic impact, extent and duration of shelter and other restrictions associated with the COVID-1 pandemic 9 and its effect on the educational and commercial markets in which the company’s modular construction division operates; (3) problems may arise during the successful integration of the business of the Company and Design Space, including, without limitation, problems associated with the potential loss of any key employees of Design Space; (4) the proposed transaction may result in unforeseen costs, including, without limitation, exposure to unregistered liabilities or unidentified issues that the company did not discover during the due diligence investigation Design Space or not covered by insurance, as well as potential adverse accounting treatment and unforeseen tax increases; (5) the business of the Company and the continued execution of performance improvement initiatives may suffer due to the uncertainty surrounding the proposed transaction, negative effects on its ability to maintain relationships with customers, employees and suppliers, or the inherent risk associated with expanding into a new geographic area; and (6) the industry may be subject to future risks described in the “Risk Factors” section of annual reports on Form 10-K, quarterly reports on Form 10-Q and other documents filed from time to time with the SEC by the company. Neither the Company nor Design Space gives assurances that they will meet their expectations and assumes no responsibility for the accuracy and completeness of any forward-looking statements.

The above list of factors is not exhaustive. You should carefully consider the above factors as well as other risks and uncertainties that affect the business of the Company described in the “Risk Factors” section of annual reports on Form 10-K, quarterly reports on Form 10-Q and others. documents filed from time to time with the SEC by the company. This press release is not intended to be a recommendation to buy, sell or hold any securities and does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction, including including the United States. Any such offer will only be made by means of a prospectus or offering memorandum and in accordance with applicable securities laws. These forward-looking statements speak only as of the date hereof. Neither the Company nor Design Space undertakes to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by securities laws. applicable movable property.

Additional information and where to find it

This press release is for informational purposes only and does not constitute an offer to buy or a solicitation of an offer to sell any securities. Annual reports on Form 10-K, quarterly reports on Form 10-Q, and other documents filed by the company or required to be filed by the company with the SEC will be available free of charge on the SEC website at the next address: In addition, these documents may be obtained free of charge (when available) from the Investor Relations section of the Company’s website at

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Keith E. Pratt
Executive Vice President and Chief Financial Officer


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