WillScot Mobile Mini (WSC) Buys Satellite Structures Portfolio
WillScot Mobile Mini Holdings Corp. WSC recently acquired Satellite Structures, Inc.’s portfolio of blast-resistant modules and related assets. The company funded the transaction through cash on hand and borrowings under the revolving credit agreement.
The deal allows WSC to enhance its offerings with existing customers in the industrial, petrochemical, manufacturing, defense and other verticals that demand the highest standards for safety, service, reliability, and turnkey solutions.
Brad Soultz, WSC’s chief executive officer, said, “As the leader in modular space and storage solutions, I am excited to build upon our industry leading safety culture and technical expertise to expand our offering of blast resistant modules, making WillScot Mobile Mini a provider of choice in this segment of the modular market.”
He continued, “We will continue to extend those capabilities through our acquisition strategy and the development of our ‘Ready to Work’ value proposition, as well as the application of technology and other commercial and organizational best practices.”
Acquisitions to Drive Growth
Over the past several years, WillScot Mobile Mini has been on an acquisition spree. It has a strong track record of business integrations generating significant synergies. During 2021, the company acquired certain assets and liabilities of seven regional modular space and storage businesses and quickly integrated these assets into the leasing portfolio and branch network. These include 15,700 storage units and 5,800 modular units for $147.2 million in cash. Also, it recorded rental equipment of $142.1 million as a result of these acquisitions. The buyout strategy helps WSC reach new customers, expand product and service offerings, and create additional opportunities for revenue and cost synergies.
In December 2021, WillScot Mobile Mini acquired McDonald Modular Solutions, which added approximately 1,300 modular units and more than 300 storage units to its existing markets in Michigan and Ohio.
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Shares of this Zacks Rank #3 (Hold) company have surged 52.1% in the past year against the Zacks Furniture industry’s 6.8% fall. The company is benefiting from continuous product innovation, solid segmental results and transformation of the legacy WillScot business into Mobile Mini's SAP platform.
Improved housing market fundamentals in the United States make the company’s near-term outlook encouraging. Lower mortgage rates have been driving new home sales, which in turn will drive demand for furniture products in the near term.
Earnings estimate of $1.18 per share for 2022 indicates growth of 55.3% year over year.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Better-Ranked Stocks in the Construction Sector
D.R. Horton, Inc. DHI currently carries a Zacks Rank #1. This homebuilder continues to gain from its industry-leading market share, solid acquisition strategy, a well-stocked supply of land, lots and homes along with affordable product offerings across multiple brands.
D.R. Horton’s earnings are expected to grow 38.5% in fiscal 2022.
M.D.C. Holdings, Inc. MDC currently holds a Zacks Rank #2 (Buy). The company’s build-to-order operating model and focus on more affordable homes have been major driving factors.
M.D.C. Holdings’ earnings are expected to grow 35.5% in 2022.
TRI Pointe Group Inc. TPH currently carries a Zacks Rank #2. This Irvine, CA-based homebuilder designs, constructs, and sells single-family detached and attached homes in the United States. Robust demand and pricing as well as improved operating leverage have been driving TRI Pointe's performance. Cost-cutting initiatives implemented earlier this year and focus on entry-level buyers have been adding to the positives.
Earnings for 2022 are expected to grow 21.1%.
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