Willscot

Courtesy of the neo-noir dystopian Blade Runner and the eye-popping sci-fi horror fest Alien, film director Ridley Scott is very well known. For good reason, described as he is, as having the best eye in the movie making business. WillScot, is different. Very different. With a market capitalisation of $3.4bn and a line in providing temporary workspace, those who know about WillScot, likely number far fewer than those who know about Ridley Scott. But those who do know WillScot, know the company has been providing modular space and portable solutions across North America for over sixty years.Think mobile units, complexes, portable classrooms and VAPS. During COVID the company has been providing critical care and first aid facilities; testing sites, treatment centres, and temporary office space to support social distancing measures. See the recent 18k square foot of portable classrooms shipped in for the University of San Diego. But demand is broader, more diversified; you will see them everywhere, dotted about. Have a look for yourself. From roadworks, to construction sites, hospitals and schools; mobile units litter the land. The recent deal with Mobile Mini is something of a game changer; a deal that brings together two iconic leaders of modular workspace and portable storage solutions. Previously it was easy for investors to push to the side of the plate due to concerns over cyclicality, size and leverage; but the deal puts the larger, merged company, more in the zone. Stand alone, WillScot was full of potential due to pricing upside from previous acquisitions, and the roll-out of value added services, like tables, chairs, WiFi, and coffee machines. Even insurance. Now, post deal, there are synergies, and less debt. A lot less debt. Indeed, brokers forecast a near 20% free cash flow yield in a few years once synergies zest the sauce. WillScot might never gain the fame of Hollywood movie mogul, and might weather an extended economic recession, but given the potential upside brokers appear to be pencilling in post the Mobile Mini deal, investors might not care.