WillScot Mobile Mini Holdings Stock

WillScot Mobile Mini Holdings Corp. is a leading business services provider specializing in innovative and flexible turnkey temporary space solutions.

The company’s diverse product offering includes modular office complexes, mobile offices, classrooms, restroom solutions, blast-resistant modules, clearspan structures, portable storage containers, and climate-controlled storage units. The company offers its customers a thoughtfully curated selection of Ready to Work solutions with value-added products and services, such as the rental of steps, ramps, furnishings, appliances, electrical and lighting products, space optimization assets, and other items that improve the overall customer experience. These turnkey space solutions offer customers flexible, low-cost, and timely solutions to meet their temporary space needs on an outsourced basis.

The company services diverse end markets across all sectors of the economy from a network of approximately 250 branch locations and additional drop lots throughout the United States (U.S.), Canada, and Mexico. The company leases turnkey temporary space solutions (lease fleet) to customers in the construction, commercial and industrial, retail and wholesale trade, energy and natural resources, education, government, healthcare, and other end markets.

Products and Services

Modular Space Solutions

The company’s modular space units meet a broad range of customer needs. The company’s modular units are typically made of steel and aluminum frames, as well as traditional building materials, and range from standalone portable units as small as 24 square feet to large complex units that can be coupled together or stacked to create versatile workspaces in excess of 10,000 square feet. In all cases, the company deploys modular units to customers rapidly from its extensive branch network using its hybrid in-house and outsourced logistics and service infrastructure. The company specializes in turnkey ‘Ready to Work’ solutions, which means its units can arrive fully equipped with air conditioning, heating, and filtration units, electrical and Ethernet ports, plumbing and utility hookups, as well as its proprietary line of furnishings and appliances, which it refers to collectively as Value-Added Products and Services (VAPS). The company’s units are transported by truck, either towed (if fitted with axles and hitches) or mounted on flat-bed trailers.

The company utilizes standard fleet maintenance procedures across the branch network, monitor fleet condition and allocate capital expenditures centrally, and ensure all units meet consistent quality and condition requirements, regardless of unit age, prior to delivery to a customer. Modular leasing is complemented by new unit sales and sales of rental units. In connection with the company’s leasing and sales activities, it provides services including delivery and installation, maintenance and ad hoc services, and removal services at the end of lease transactions.

Panelized and Stackable Offices: The company’s FLEX panelized and stackable offices are the next generation of modular space technology and offers maximum flexibility and design configurations. These units provide a modern, innovative design, smaller footprint, ground level access, and interchangeable panels, including all glass panels that allow customers to configure the space to their precise requirements. These units can expand upwards up to three stories and outwards, which provides maximum versatility.

Single-Wide Modular Space Units: Single-wide modular space units include mobile offices and sales offices. These units offer maximum ease of installation and removal and are deployed across the broadest range of applications in the company’s fleet. These units typically have open interiors, which can be modified using movable partitions, and include tile floors, air conditioning, heating and filtration units, partitions and toilet facilities.

Section Modulars and Redi-Plex: Section modulars are two or more units combined into one structure. Redi-Plex complexes offer advanced versatility for large, open floor plans or custom layouts with private offices. Redi-Plex is built with clearspan construction, which eliminates interference from support columns and allows for up to sixty feet of open building width and building lengths that increase in twelve-foot increments based on the number of units coupled together. The company’s proprietary design meets a wide range of national and state building, electrical, mechanical, and plumbing codes, which creates versatility in fleet management. Examples of section modular units include hospital diagnostic annexes, special events headquarters, temporary data centers, and larger general commercial offices.

Classrooms: Classroom units are generally double-wide units or FLEX panelized units adapted specifically for use by school systems or universities. Classroom units usually feature teaching aids, air conditioning, heating and filtration units, windows and, if requested, restroom facilities.

Ground Level Offices: The company also offers steel ground level offices from 10 to 40 feet in length and 8 or 10 feet in width. Many of these units are converted to office use from International Organization for Standardization (ISO) certified shipping containers. These offices are available in various configurations, including all-office floor plans or office and storage combination units that provide a 10- or 15-foot office with the remaining area available for storage. Ground level offices provide the advantage of ground accessibility for ease of access and high security in an all-steel design. These office units are equipped with electrical wiring, air conditioning, heating and filtration units, phone jacks, carpet or tile, high security doors, and windows with security bars or shutters. If requested, these offices are also equipped with sinks, hot water heaters, cabinets and restroom facilities.

Blast-Resistant Modules: The company’s diverse fleet of blast-resistant modules has been specifically designed to protect its petrochemical, energy, refinery, and defense customers and any customers operating in blast radius zones. These modules range from 480 square foot units to 2,400 square foot complexes and can be stacked to maximize space. The company’s blast-resistant units are built for quick deployment to enhance worksite safety in the most hazardous industries, conditions, and blast threats.

Clearspan Structures: The company’s temporary and semi-permanent clearspan structures allow it to offer more expansive flexible spaces to customers. These highly configurable and durable temporary fabric structures are commonly utilized by existing customers across virtually all end markets that it serves. Clearspan structures, also referred to as fabric buildings or industrial tents, are rapidly deployable and have numerous use cases including large-scale industrial warehousing, controlled environments for construction sites, retail and distribution space, and high-end event spaces among many others.

Other Modular Space: The company offers a range of other specialty products that vary across regions and provide flexibility to serve demands for local markets. Examples include workforce accommodation units with dining facilities used to house workers, often in remote locations, and stand-alone restroom facilities to complement office and classroom units.

Portable Storage Solutions

Portable Storage Containers: The company’s portable storage containers offer an assortment of differentiated features such as patented locking systems, premium and multiple door options, optional climate control, and numerous configuration options. Standard portable storage containers are made from weather-resistant corrugated steel and are available in lengths ranging from 5 to 48 feet, widths of either 8 or 10 feet, and a variety of configuration options. Doors can be placed at the front, front and back, or the sides of containers. Other options include partitions, ramps, lighting, shelving, and other interior organizational solutions, including PRORACK, the company’s innovative complete system of sturdy readily movable surfaces. The company provides its customers with various differentiated portable storage offerings, ranging from a standard ISO container to more premium products with enhanced security and other features. Storage containers can be equipped with the company’s patented Tri-Cam Locking System, which features a waist-level opening lever and interlocking bars to provide easy access for the customer without sacrificing security. The company also offers ContainerGuardLock, an optional security device, which features a hidden six-pin tumbler system and is made from drill-resistant hardened steel.

Steel containers have a long useful life with no technical obsolescence. The company’s portable storage containers generally have estimated useful lives of 30 years from the date it builds or acquires and remanufactures them, with average residual values in excess of 50%. The company maintains its steel containers on a regular basis by removing rust, painting them with rust inhibiting paint, plug-welding holes, and occasionally replacing the wooden floor or a rusted steel panel. Repainting the outside of storage units is the most common maintenance item. A properly maintained container is essentially in the same condition as when it was initially acquired or remanufactured.

The remanufacturing process begins with the purchase of used ISO-certified containers from leasing companies, shipping lines, and brokers. These containers were originally built to ISO standards and are 8 feet wide, up to 9.5 feet high and 20, 40 or 45 feet long. After acquisition, the company remanufactures and modifies these ISO containers. Remanufacturing typically involves cleaning, removing rust and dents, repairing floors and sidewalls, painting, and adding company logos or signs, and may include further customization by adding the company’s proprietary easy opening door system and its patented Tri-Cam Locking System. Modification typically involves splitting some containers into differing lengths.

Cold Storage Containers and Trailers: The company also offers climate-controlled containers, walk-in freezers, refrigerated storage trailers, and dock-height refrigerated trailers. These turnkey cold storage solutions come in a variety of sizes and are available for lease across the United States.

VAPS

The company offers a thoughtfully curated portfolio of VAPS that make modular space and portable storage units more productive, comfortable, secure, and Ready to Work for its customers. The company leases furniture, steps, ramps, basic appliances, internet connectivity devices, integral tool racking, heavy duty capacity shelving, workstations, electrical and lighting products and other items to its customers for use in connection with its products. The company also offers its lease customers a damage waiver program that protects them in case the leased unit is damaged.

Delivery, Installation and Removal

The company operates a hybrid in-house and outsourced logistics and service infrastructure that provides delivery, site work, installation, disassembly, unhooking and removal, and other services to its customers for an additional fee as part of its leasing and sales operations. Revenue from delivery, site work, and installation results from the transportation of units to a customer's location, as well as site work required prior to installation, and installation of the units which have been leased or sold. Typically, modular units are placed on temporary foundations constructed by the company’s in-house service technicians or subcontractors. These in-house service technicians or subcontractors also generally install any ancillary products and VAPS. The company also derives revenue from disassembling, unhooking, and removing units once a lease expires.

Product Leases

The company primarily leases, rather than sells, its turnkey temporary space solutions to customers, which results in a highly diversified and predictable recurring revenue stream. For the year ended December 31, 2023, over 90% of new lease orders were on the company’s standard lease agreement, pre-negotiated master lease, or national account agreements. Rental contracts with customers within its Modular segment are generally based on a 28-day or monthly rate and billing cycle. The initial lease periods vary, and the company’s leases are customarily renewable on a month-to-month basis after their initial term. For the year ended December 31, 2023, the average effective duration of the company’s consolidated lease portfolio for modular space and portable storage units, excluding seasonal portable storage units, was approximately 37 months. As a result, the company’s lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of its lease portfolio.

For the year ended December 31, 2023, the company’s average minimum contractual lease term at the time of delivery in its Modular segment for modular space units was 13 months. The company’s leases generally require customers to maintain liability and property insurance covering the units during the lease term and to indemnify it from losses caused by the negligence of the customer or their employees.

Rental contracts with customers within the company’s Storage segment are generally based on a 28-day rate and billing cycle. The rental continues until cancelled by the customer or it. On average, steel storage containers on rent for the year ended December 31, 2023, in the company’s Storage segment, excluding seasonal portable storage units, had been in place for over 38 months, and the steel ground level offices on rent for the year ended December 31, 2023 had been in place for approximately 22 months.

Demand for the company’s products varies by end market. Construction customers typically reflect higher demand during months with more temperate weather, while demand from large retailers is stronger from September through December, when more space is needed to store holiday inventories.

As of December 31, 2023, the company had over 368,000 total units including over 156,000 modular space units, approximately 212,000 portable storage units, and other value-added products and approximately 130 million square feet of relocatable commercial space. Approximately 99,000 of the company’s modular space units, or 63%, and 151,000 of its portable storage units, or 71%, were on rent as of December 31, 2023.

Product Sales

The company complements its core leasing business by selling both new and used units, allowing it to leverage its scale, achieve purchasing benefits, and redeploy capital employed in its lease fleet. Generally, the company purchases new units from a broad network of third-party manufacturers, or in some instances, manufacture the units itself.

In the normal course of managing its business, the company also sells idle, used rental units at fair market value and units that are already on rent if the customer expresses interest in owning, rather than continuing to rent, the unit. The company’s sales business may include modifying or customizing units to meet customer requirements. The company also offers delivery, installation, and removal-related services for an additional fee as part of its sales operations.

Customers

The company’s customers operate in a diversified set of end markets, including construction, commercial and industrial, retail and wholesale trade, energy and natural resources, education, government and institutions, and healthcare. The company tracks several market leading indicators to predict demand, including those related to its two largest end markets, the commercial and industrial segment and the construction segment, each of which accounted for approximately 43% and 42% of its revenues, respectively, for the year ended December 31, 2023. To optimize the use of fleet assets across its branch network, the company centrally manages fleet rebalancing across its end markets. This allows the company to serve 15 distinct end markets. For the year ended December 31, 2023, the company’s top 10 customers accounted for approximately 6% of revenues, and its top 50 customers accounted for approximately 13% of revenues, reflecting low customer concentration and significant project diversification within its portfolio.

The company’s logistics and service infrastructure is designed to meet or exceed its customers’ expectations by reacting quickly, efficiently, and with consistent service levels. As a result, the company has established strong relationships with a diverse customer base, ranging from large multinational companies to local sole proprietors. The company served over 85,000 unique customers in 2023. The company’s customers prefer its modular space and portable storage products over fixed, on-site built space because they are a quick, flexible, cost-effective, and low-risk solution for temporary or permanent expansion or storage. The company operates within the modular space and portable storage markets. In the normal course of providing its Ready to Work solutions, the company performs services that are characteristic of activities in other industries. For example, the company coordinates a broad network of third-party and in-house transportation and service resources to support the timely movement of its products to, as well as maintenance on, customer sites. Additionally, the company designs, sources, leases, and maintains a broad offering of ancillary products, including furniture, which render its modular and storage units immediately functional in support of its customers’ needs. The company has developed networks of third-party service providers that it coordinates to expand the breadth of capabilities that its customers can source through it. These third-party-managed services represent incremental revenue and margin opportunities for the company and simplify the number of vendor touchpoints for its customers.

The company also provides technical expertise and oversight for customers regarding building design and permitting, site preparation, and expansion or contraction of installed space based on changes in project requirements. Further, we have the capability to compete in adjacent markets, such as other job site services, facilities management, logistics, and others that are natural extensions of its temporary commercial space capabilities.

The company’s strategy involves operating standardized rental equipment and Ready to Work solutions that can be redeployed across its diversified customer base and branch network in 15 discrete end markets. Key customer end markets include:

Construction and Infrastructure

The company provides office and storage space to a broad array of contractors associated with non-residential buildings and non-building infrastructure, and to a lesser extent, residential construction. The company’s client portfolio includes many of the largest general contractors and engineering, architecture, procurement, and construction companies in North America, working across all of the non-residential construction sub-sectors. Examples include highway, street, bridge, and tunnel contractors; water, sewer, communication, and power line contractors; and special construction trades, including glass, glazing, and demolition. The company’s construction and infrastructure customer base is characterized by a wide variety of contractors that are associated with original construction, as well as capital improvements in the private, institutional, and municipal arenas. Units are used as offices, lunch and break rooms, accommodations, restroom facilities, material and equipment storage facilities, security offices, and other applications.

Commercial and Industrial

Customers in this category use the company’s products as their primary office or retail space, to expand their existing commercial workspace, to increase their storage capabilities, or as temporary space for festivals, trade shows, sporting, and other events. Customers in this category span a variety of industries ranging from commercial offices; diversified manufacturing; agriculture, forestry and fishing; arts, media, hotels, and entertainment; and many other industrial end markets.

The commercial and industrial segment also includes customers in retail and wholesale trade. These include department, drug, grocery, and strip mall stores, logistics, warehousing and distribution services, as well as restaurants, service stations, and dry cleaners. The company’s customers in retail and wholesale trade include some of the world's largest retailers who have storage needs throughout all stages of their supply chain. On a stand-alone basis, retail and wholesale trade customers consisted approximately 13% of fiscal year 2023 rental revenue.

Energy and Natural Resources

The company’s products are leased to companies involved in electricity generation and transmission, utilities, up- mid- and down-stream oil and gas, mining exploration and extraction, and other related sectors. Increasingly, the development of renewable energy infrastructure has emerged to complement its traditional energy clientele. Units are used as temporary offices, break rooms, accommodations, security offices, blast-resistant facilities, and other applications.

Education

Rapid shifts in populations within regions, as well as expanding square footage per student requirements in in-person education settings, often necessitate expansion of education facilities, across the spectrum of elementary and secondary schools and universities and colleges. Regional and local governmental budgetary pressures, classroom size reduction legislation, refurbishment of existing facilities, and the expansion of charter schools have made modular classrooms a convenient and cost-effective way to expand capacity in education settings. In addition, the company’s products are used as classrooms when schools are undergoing large scale modernization, which allows continuous operation of a school while modernization progresses.

Government and Institutions

Government customers consist of national, state, provincial, and local public sector organizations. Modular space and portable storage solutions are particularly attractive to focused niches, such as healthcare facilities, small municipal buildings, courthouses, military installations, national security buildings, and offices during building modernization, as well as disaster relief.

Competition

The company’s competitors include lessors of storage units, mobile offices, and other structures used for portable storage, as well as traditional commercial office space and conventional fixed self-storage facilities. Significant competitors include McGrath RentCorp, United Rentals, ATCO Structures & Logistics, and Satellite Shelters. Numerous other regional and local companies compete across the markets that the company serves.

Strategy

The key elements of the company’s strategy are to expand Penetration of Value-Added Products and Services (VAPS); enhance market penetration between segments; and leverage scale and organic initiatives with accretive acquisitions.

Intellectual Property

The company operates primarily under the WillScot and Mobile Mini brands. The company protects its products and services through the use of trademarks and patents. The company’s trademarks and patents are registered or pending application for registrations in the US Patent and Trademark Office and various non-US jurisdictions. On its Modular fleet, the company maintains a patent for the design of its FLEX units in the US and other patents in the US and non-US jurisdictions concerning various assembly and panel components. On its Storage fleet, the company has patented its proprietary Tri-Cam Locking System, ContainerGuardLock and other continued improvements in locking technology in the markets in which it operates and has obtained a trademark for PRORACK, its innovative complete system of sturdy, readily movable surfaces.

Regulatory and Environmental Compliance

The jurisdictions in which the company operates are subject to anti-bribery laws and regulations, such as the US Foreign Corrupt Practices Act of 1977, as amended (the FCPA).

Dispositions

On January 31, 2023, the company completed the sale of its former United Kingdom Storage Solutions (UK Storage Solutions) segment.

Acquisitions

During 2023, the company acquired a U.S. national provider of climate-controlled storage solutions, which consisted primarily of approximately 2,200 climate-controlled containers and refrigerated storage trailers, a regional modular space manufacturing and leasing business, which consisted primarily of approximately 1,300 modular leasing units, and a U.S. national provider of premium large clearspan structures. The company also acquired certain assets and liabilities of five smaller entities, which consisted primarily of approximately 1,800 storage units and 700 modular units.

History

The company was founded in 1993. The company was incorporated in 2017. It was formerly known as WillScot Corporation and changed its name to WillScot Mobile Mini Holdings Corp. in 2020.