UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. 3)

 

Filed by the Registrant þ

 

Filed by a Party other than the Registrant o

 

Check the appropriate box:

 

þ  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to §240.14a-12

 

MOBILE MINI, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

o  No fee required.

 

 

Common stock, par value $0.01 per share, of MSG WC Holdings Corp.

 

Acquisition of all outstanding common stock of MSG WC Holdings Corp.

 

 

$166,500,008 (Holders of MSG WC Holdings Corp. common stock will receive an aggregate of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock of Mobile Mini, Inc. with an aggregate liquidation preference of $154,000,008 and $12,500,000 in cash, subject to closing and post-closing adjustments)

 

$166,500,008

 

$6,543.45

 

þ  Fee paid previously with preliminary materials.

 

 

 

 

 

 

 

 

Subject to Completion

 

Preliminary Proxy Materials dated June 3, 2008

 

 

7420 South Kyrene Road
Suite 101
Tempe, Arizona 85283
[ • ], 2008

 

Dear Stockholders:

 

MERGER PROPOSED — YOUR VOTE IS IMPORTANT

 

We cordially invite you to attend a special meeting of stockholders of Mobile Mini, Inc. to be held at the Hilton Garden Inn Phoenix-Airport, 3422 E. Elwood Street (off I-10 at the East University Drive Exit), Phoenix, Arizona 85040, on [ • ], 2008.

 

On February 22, 2008, we and Cactus Merger Sub, Inc., a wholly owned subsidiary of Mobile Mini, Inc., entered into an Agreement and Plan of Merger, which we refer to as the Merger Agreement, with MSG WC Holdings Corp., which we refer to as Mobile Storage Group, the indirect parent of Mobile Storage Group, Inc. and Mobile Services Group, Inc., and Welsh, Carson, Anderson & Stowe X, L.P., as representative of the stockholders of MSG WC Holdings Corp., whereby Cactus Merger Sub will merge with and into MSG WC Holdings Corp. in a transaction valued at approximately $701.5 million. Pursuant to the merger, we will assume approximately $535.0 million of Mobile Storage Group’s outstanding indebtedness and will acquire all outstanding shares of Mobile Storage Group for $12.5 million in cash and 8,555,556 shares of newly issued Mobile Mini convertible redeemable participating preferred stock, which we refer to as the preferred stock, with a liquidation preference of $154.0 million, subject to certain closing and post-closing adjustments. In no event shall Mobile Mini be obligated to issue to the stockholders of Mobile Storage Group more than 8,555,556 shares of preferred stock. The preferred stock will be initially convertible into 8,555,556 shares of our common stock, representing a fully diluted ownership in Mobile Mini of approximately 20.0%, as of March 31, 2008.

 

At the special meeting, we will ask you to:

 

(1) approve and adopt the Merger Agreement and the merger;

 

(2) approve an amendment to our certificate of incorporation to increase the number of authorized shares of preferred stock, par value $0.01 per share, from 5,000,000 shares to 20,000,000 shares;

 

(3) approve an amendment to our certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock;

 

(4) approve the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock in connection with the merger;

 

(5) approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals; and

 

(6) approve an amendment to our certificate of incorporation to provide that the authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time.

 

This proxy statement provides information about the merger and Mobile Storage Group that holders of Mobile Mini common stock should know when they vote. We urge you to read this entire proxy statement carefully.

 

The Board of Directors of Mobile Mini unanimously recommends that holders of common stock vote “for” each of the Proposals. While each of the Proposals is being voted upon separately, each of Proposals 1, 2, 3, 4 and 5

relate to the merger and related matters and each of Proposals 1, 2, 3 and 4 must be approved in order for any of them to be implemented and the merger to be consummated.

 

Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the special meeting, please submit a proxy as soon as possible to make sure your shares are represented at the special meeting. Please take the time to submit your proxy by following the instructions presented in this proxy statement.

 

I strongly support this combination of our companies and join with our Board of Directors in recommending that you vote in favor of each of the Proposals described in this proxy statement.

 

Steven G. Bunger
President, Chief Executive Officer and
Chairman of the Board

 

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved the merger, passed upon the merits or fairness of the Merger Agreement or the transactions contemplated thereby, including the proposed merger, or passed upon the adequacy or accuracy of the information contained in this document. Any representation to the contrary is a criminal offense.

 

This proxy statement is dated [ • ], 2008, and is first being mailed to stockholders of Mobile Mini on or about [ • ], 2008.

 

 

7420 South Kyrene Road

Suite 101

Tempe, Arizona 85283

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

 

A special meeting of stockholders of Mobile Mini, Inc. will be held on [ • ], 2008 at [ • ], local time, at the Hilton Garden Inn Phoenix-Airport, 3422 E. Elwood Street (off I-10 at the East University Drive Exit), Phoenix, Arizona 85040 for the following matters:

 

1. To approve and adopt the Merger Agreement by and among Mobile Mini, Cactus Merger Sub, Inc., a wholly-owned subsidiary of Mobile Mini, MSG WC Holdings Corp., the indirect parent of Mobile Storage Group, Inc. and Mobile Services Group, Inc., and Welsh, Carson, Anderson & Stowe X, L.P., as representative of the stockholders of MSG WC Holdings Corp., pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. and immediately thereafter, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini;

 

2. To approve an amendment to Mobile Mini’s certificate of incorporation to increase the number of authorized shares of preferred stock, par value $0.01 per share, from 5,000,000 shares to 20,000,000 shares;

 

3. To approve an amendment to Mobile Mini’s certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock;

 

4. To approve the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock in connection with the merger;

 

5. To approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals;

 

6. To approve an amendment to Mobile Mini’s certificate of incorporation to provide that the authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time; and

 

7. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

 

The Board of Directors of Mobile Mini unanimously recommends that you vote FOR all of the Proposals described above.

 

Only stockholders of record at the close of business on [ • ], 2008 are entitled to receive notice of and to vote at the special meeting and any adjournment or postponement of the special meeting. A list of stockholders entitled to vote will be available for examination at the meeting by any stockholder for any purpose germane to the meeting. The list will also be available for the same purpose for ten days prior to the meeting at our principal executive office at 7420 South Kyrene Road, Suite 101, Tempe, Arizona 85283

 

Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the special meeting, please submit a proxy as soon as possible to make sure your shares are represented at the special meeting. Please take the time to submit your proxy by following the instructions presented in this proxy statement.

 

By Order of the Board of Directors

 

Steven G. Bunger,
President, Chief Executive Officer and
Chairman of the Board

 

          , 2008

 

SUMMARY TERM SHEET

 

This Summary Term Sheet highlights selected information contained in the proxy statement and may not contain all of the information that is important to you. You are urged to read the entire proxy statement, along with the annexes and exhibits attached thereto, carefully.

 

 

In connection with Mobile Mini’s acquisition of all of the outstanding shares of capital stock of Mobile Storage Group, pursuant to the Merger Agreement, Mobile Mini will:

 

 

 

 

In no event shall Mobile Mini be obligated to issue to the stockholders of Mobile Storage Group more than 8,555,556 shares of preferred stock.

 

The preferred stock:

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

The following questions and answers are intended to address briefly some commonly asked questions regarding the special meeting and the merger. These questions and answers may not address all of the information that may be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and in the documents referred to or incorporated by reference in this proxy statement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(800) 607-0088 (U.S. and Canada)
(203) 658-9400 (International)

 

You may also obtain additional information about Mobile Mini from the documents we file with the Securities and Exchange Commission, or SEC, or by following the instructions in the section entitled “Where You Can Find More Information” on page 111.

 

SUMMARY

	•	assume approximately $535.0 million of the Mobile Storage Group’s outstanding indebtedness;
	•	pay $12.5 million in cash; and
	•	issue 8,555,556 shares of Mobile Mini preferred stock with a liquidation preference of $154.0 million, subject to certain closing and post-closing adjustments.

	•	will be initially convertible into 8,555,556 shares of Mobile Mini’s common stock, representing a conversion price of $18.00 per Mobile Mini share; and

	•	will represent a fully diluted ownership in Mobile Mini of approximately 20.0% as of March 31, 2008.

Proposal 2:	Amendment to Mobile Mini’s Certificate of Incorporation to Authorize Additional Shares of Preferred Stock (page 22)

Proposal 3:	Amendment to Mobile Mini’s Certificate of Incorporation to Authorize Designation of Series A Convertible Redeemable Participating Preferred Stock (page 22)

Proposal 4:	Approval of Issuance of Series A Convertible Redeemable Participating Preferred Stock (page 24)

Proposal 6:	Amendment to Mobile Mini’s Certificate of Incorporation to Authorize the Board of Directors of Mobile Mini to Determine Terms of Preferred Stock (page 25)

	•	the merger will establish the combined company as a leading global provider of portable storage solutions in the US and the UK;
	•	our ability to service an expanded customer base will be significantly expanded;
	•	the merger has been structured to maintain a strong balance sheet with sufficient liquidity and our revenue growth potential will be improved through implementing our growth model into newly acquired Mobile Storage Group branches; and
	•	the merger is expected to generate cost synergies of at least $25 million on an annualized basis, which are expected to be fully realized by the end of fiscal year 2009, as a result of the significant overlap in corporate functions and branch infrastructure.

	•	approval of the merger by the holders of a majority of the outstanding shares of Mobile Mini common stock;

	•	The representations and warranties of each of party (which shall be read as though none of them contained any materiality or material adverse effect qualifications), shall be true and correct on the date of the closing (other than those made as of a specified date, in which case as of such specified date), except to the extent that breaches of such representations and warranties do not have and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the representing party and subject to other exceptions regarding the parties’ representations and warranties relating to authority and enforceability, consents and approvals and no violations, capitalization (subject to de minimis exceptions), subsidiaries capitalization, and no material adverse effect (and absence of certain changes with respect to Mobile Storage Group) since September 30, 2007 to February 22, 2008.
	•	the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, or HSR;
	•	no occurrence of events, facts, circumstances, changes or effects, individually or in the aggregate, constituting a material adverse effect on Mobile Mini or Mobile Storage Group, as the case may be, since February 22, 2008; and
	•	Mobile Mini’s receipt of the amounts set forth in the commitment letter upon the terms and conditions of the commitment letter or any alternative financing in accordance with the Merger Agreement.

 

Some of the statements contained or incorporated by reference in this proxy statement, including those relating to Mobile Mini’s, Mobile Storage Group’s and the combined company’s strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “will,” “should,” “may,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” and similar expressions, are forward-looking statements. Forward looking statements include the information concerning possible or assumed future results of operations of Mobile Mini, Mobile Storage Group and the combined company as set forth under “The Merger — Reasons for the Merger; Recommendation of the Board of Directors of Mobile Mini” beginning on page 30. These statements are not historical facts but instead represent only expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. These risks include, among other things, risks related to the uncertainty that Mobile Mini will be able to realize the anticipated benefits and cost savings of the merger and integrate successfully its existing business with the Mobile Storage Group business. In addition, because Mobile Mini will take on substantial additional indebtedness to finance the merger, this could limit Mobile Mini’s financial and operating flexibility and ability to react to changes in the industry and economic conditions and could divert financial resources away from the expansion and improvement of its business. Furthermore, these risks and uncertainties may also include other market, business, legal and operational uncertainties discussed elsewhere in this document and the documents which are incorporated herein by reference. For a discussion of certain of these risks, see Part I, Item 1A of Mobile Mini’s annual report on Form 10-K for the year ended December 31, 2007, which such discussion is incorporated herein by reference. See “Where You Can Find More Information beginning on page 111 of this proxy statement.’’

 

Mobile Mini undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

 

Our common stock trades on The Nasdaq Global Select Market under the symbol “MINI”. The following are the high and low sale prices for the common stock during the periods indicated as reported by the Nasdaq Stock Market after giving effect to a two-for-one stock split effected on March 10, 2006.

 

 

We had approximately 198 holders of record of our common stock on May 5, 2008, and we estimate that we have more than 5,000 beneficial owners of our common stock.

 

We have not paid cash dividends on our common stock and do not expect to do so in the foreseeable future, as we intend to retain all earnings to provide funds for the operation and expansion of our business. Further, our revolving credit agreement, the indenture governing our senior notes and the indenture governing Mobile Storage Group’s Senior Notes (which we will assume and which will remain outstanding after the closing of the merger) restrict our ability to pay dividends or other distributions on our common stock. In the future we may enter into agreements that may restrict our ability to pay dividends or other distributions on our common stock.

 

The following table shows Mobile Mini’s capitalization as of March 31, 2008 on an actual and pro forma basis. The “actual” column reflects our capitalization as of March 31, 2008 on a historical basis, without any adjustments to reflect subsequent or anticipated events. The “pro forma” column reflects our capitalization as of March 31, 2008 with adjustments to reflect:

 

 

 

 

 

The following table sets forth selected historical consolidated financial information of Mobile Mini for the periods presented. The selected financial information, as of December 31, 2007, and for each of the five fiscal years then ended, has been derived from Mobile Mini’s audited consolidated financial statements. This financial information and other data should be read in conjunction with the respective audited consolidated financial statements of Mobile Mini, including the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated in this proxy statement by reference. See “Where You Can Find More Information” beginning on page 111. This information should also be read in conjunction with the unaudited pro forma condensed consolidated financial statements beginning on page 61.

 

 

 

The following tables set forth the selected historical consolidated financial data of Mobile Storage Group for the periods indicated. Mobile Services Group, Inc. was acquired by MSG WC Holdings Corp. on August 1, 2006. The financial data for periods prior to August 1, 2006 are derived from the financial statements of Mobile Services Group, Inc. (predecessor) prior to its acquisition by MSG WC Holdings Corp. (successor). The selected historical consolidated financial data for the fiscal year ended December 31, 2005, the periods from January 1, 2006 to August 1, 2006, and from August 2, 2006 to December 31, 2006, for the fiscal year ended December 31, 2007 and the consolidated balance sheet information as of December 31, 2006 and 2007 are derived from the audited consolidated financial statements of MSG WC Holdings Corp. included in this proxy statement. The selected historical consolidated financial data for the three months ended March 31, 2008 and the consolidated balance sheet information as of March 31, 2008 are derived from the unaudited consolidated financial statements of MSG WC Holdings Corp. also included in this proxy statement. The selected historical consolidated financial data as of and for the fiscal year ended December 31, 2003 and 2004 and the consolidated balance sheet information as of December 31, 2005 are derived from the audited consolidated financial statements of Mobile Services Group, Inc. not included in this proxy statement. The financial information set forth below should be read in conjunction with Mobile Storage Group’s financial statements and the related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in this proxy statement.

 

 

 

The following tables present, as of December 31, 2007, and as of March 31, 2008 and for the year ended December 31, 2007 and for the quarter ended March 31, 2008, selected unaudited pro forma condensed combined financial data of Mobile Mini and has been prepared using the purchase method of accounting. The unaudited pro forma condensed combined statements of operations data gives effect to the merger as if it had occurred on the first day of the period and the unaudited pro forma condensed combined balance sheet data gives effect to the merger as if it had occurred on the date of such balance sheet.

 

You should read this information in conjunction with (i) the separate historical consolidated financial statements and accompanying notes of Mobile Mini incorporated by reference into this proxy statement, (ii) the separate historical consolidated financial statements and accompanying notes of Mobile Storage Group included in this proxy statement and (iii) the unaudited pro forma condensed combined financial statements and accompanying notes included elsewhere in this proxy statement. See “Unaudited Pro Forma Condensed Combined Financial Statements” and “Where You Can Find More Information” beginning on page 61 and page 111, respectively.

 

The selected unaudited pro forma condensed combined financial data is provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Mobile Mini would have been had the business combination with Mobile Storage Group occurred on the respective date assumed, nor are they necessarily indicative of future consolidated operating results or financial position.

 

The selected unaudited pro forma condensed combined financial data does not reflect anticipated benefits derived from combined synergies, operating efficiencies and cost savings that are expected to result from the acquisition, and does not give benefits to expected expansion to be derived from the combined company’s growth projects nor changes in leasing yield subsequent to the date of such unaudited pro forma condensed combined financial data. The data also does not include the anticipated integration costs that we expect to incur as part of consummating the merger, consisting primarily of costs relating to employee severance and retention, asset and personnel relocations, eliminating certain Mobile Mini branch locations which overlap with Mobile Storage Group branch locations and certain duplicate functions of the companies such as payroll, advertising and corporate operating systems. Mobile Mini estimated these integration costs will be approximately $19.0 million, with some of these expenses incurred at closing and others incurred over a period of time.

 

 

 

 

Mobile Mini is furnishing this proxy statement to you in order to provide you with important information regarding the matters to be considered at the special meeting and at any adjournment or postponement of the special meeting. Mobile Mini first mailed this proxy statement and the accompanying form of proxy to its stockholders on or about [ • ], 2008.

 

Special Meeting Date, Time and Place

 

A special meeting of stockholders will be held on [ • ], 2008 at [ • ] [a/p].m. local time at the Hilton Garden Inn Phoenix-Airport, 3422 E. Elwood Street (off I-10 at the East University Drive Exit), Phoenix, Arizona 85040.

 

Agenda

 

At the special meeting, stockholders of Mobile Mini will be asked to consider and vote upon the following Proposals:

 

 

These Proposals are being voted upon separately, and only approval of Proposals No. 1, 2, 3 and 4 is a condition to completion of the merger.

 

Record Date; Stockholders Entitled to Vote

 

Only stockholders of record at the close of business on [ • ], 2008 are entitled to receive notice of and to vote at the meeting and any adjournment or postponement of the special meeting.

 

As of the record date, directors and executive officers of Mobile Mini and their affiliates as a group beneficially owned and were entitled to vote approximately [1,098,106] shares of Mobile Mini common stock, representing approximately [3.2]% of the votes entitled to be cast at the special meeting. All of the directors and executive officers of Mobile Mini who are entitled to vote at the special meeting have indicated that they intend to vote their shares of Mobile Mini common stock in favor of each of the Proposals.

 

Voting and Revocation of Proxies

 

The proxy accompanying this proxy statement is solicited on behalf of the Board of Directors of Mobile Mini for use at the special meeting.

General.  Assuming a quorum is present, shares represented by a properly signed and dated proxy will be voted at the special meeting in accordance with the instructions indicated on the proxy. Proxies that are properly signed and dated but that do not contain voting instructions will be voted FOR each of the Proposals.

 

Abstentions.  Mobile Mini will count a properly executed proxy marked “abstain” with respect to a particular Proposal as present for purposes of determining whether a quorum is present. If you “abstain” from voting with respect to Proposals 1, 2, 3 and 6 it will have the same effect as if you voted “against” such Proposal.

 

Broker Non-Votes.  Proxies submitted by brokers that do not indicate a vote for some or all of the Proposals because the brokers do not have discretionary voting authority and have not received instructions from you as to how to vote on those Proposals (so-called “broker non-votes”) are considered “shares present” for purposes of determining whether a quorum exists. Broker non-votes with respect to each of the Proposals are not deemed to be “present”.

 

Voting Shares in Person that are Held Through Brokers.  If you are a “shareholder of record,” you may vote your shares in person at the special meeting. If you hold your shares in “street name,” you must obtain a legal proxy from your broker, banker, trustee or nominee, giving you the right to vote the shares at the special meeting.

 

Submitting a Proxy by Telephone or Through the Internet.  Delaware law permits submission of proxies by telephone or electronically through the Internet, instead of submitting proxies by mail on the enclosed proxy card. Thus, stockholders of record and many stockholders who hold their shares through a broker or bank will have the option to submit their proxies or voting instructions by telephone or electronically through the Internet. Please note that there are separate arrangements for using the telephone and the Internet depending on whether your shares are registered in Mobile Mini’s stock records in your name or in the name of a broker/bank/trust/nominee. If you hold your shares through a broker/bank/trust/nominee, your broker/bank/trust/nominee will provide you with materials and instructions for voting your shares.

 

Revocation of Proxies.  You may revoke your proxy by doing one of the following:

 

 

Required Stockholder Vote

 

In order to conduct business at the special meeting, a quorum must be present. The holders of a majority of the votes entitled to be cast at the special meeting, present in person or represented by proxy, constitute a quorum under Mobile Mini’s bylaws. Mobile Mini will treat shares of Mobile Mini’s common stock represented by a properly signed and returned proxy, including abstentions and broker non-votes, as present at the Mobile Mini special meeting for the purposes of determining the existence of a quorum.

 

With respect to any matter submitted to a vote of Mobile Mini stockholders, each holder of Mobile Mini common stock will be entitled to one vote, in person or by proxy, for each share of Mobile Mini common stock held in his, her or its name on the books of Mobile Mini on the record date.

 

Proposals 4 and 5 require the affirmative vote of a majority of those shares present in person or represented by proxy and entitled to vote thereon at the special meeting.

 

Proposals 1, 2, 3 and 6 require the affirmative vote of holders of at least a majority of our outstanding common stock.

 

All other actions considered at the meeting may be taken upon the affirmative vote of a majority of those shares present in person or represented by proxy and entitled to vote thereon at the special meeting.

 

As of the record date, directors and executive officers of Mobile Mini and their affiliates as a group beneficially owned and were entitled to vote approximately [1,098,106] shares of Mobile Mini common stock, representing

approximately [3.2]% of the votes entitled to be cast at the special meeting. All of the directors and executive officers of Mobile Mini who are entitled to vote at the special meeting have indicated that they intend to vote their shares of Mobile Mini common stock in favor of each of the Proposals, although such persons have not entered into agreements obligating them to do so.

 

Recommendations by the Board of Directors of Mobile Mini

 

The Board of Directors of Mobile Mini unanimously recommends that Mobile Mini stockholders vote FOR each of the Proposals.

 

The matters to be considered at the special meeting are of great importance to the stockholders of Mobile Mini. Accordingly, you are encouraged to read and carefully consider the information presented in this proxy statement, and to submit your proxy by telephone or mail in the enclosed postage-paid envelope.

 

Proxy Solicitation

 

Mobile Mini will pay the costs of soliciting proxies. Pursuant to the terms of the Merger Agreement, the fees and expenses associated with the filing, printing and mailing of this proxy statement will be borne by Mobile Mini. We have retained Morrow & Co., LLC to assist in the solicitation of proxies. We will pay Morrow & Co., LLC $7,500 plus out-of-pocket expenses for its assistance. Certain directors, officers or employees of Mobile Mini may solicit proxies by telephone, facsimile, email or personal contact. They will not be specifically compensated for doing so. The extent to which any proxy soliciting efforts will be necessary depends upon how promptly proxies are received. You should send in your proxy by mail without delay or vote by telephone. Mobile Mini also reimburses brokers and other custodians, nominees and fiduciaries for their expenses in sending these materials to you and getting your voting instructions. A more complete description of how to send your proxy is included on the proxy accompanying this proxy statement.

 

Other Business

 

Mobile Mini is not currently aware of any business other than the named Proposals to be acted upon at the special meeting. If, however, any other matters are properly brought before the meeting, or any adjournment or postponement thereof, the persons named in the enclosed form of proxy, and acting under that proxy, will have discretion to vote or act on those matters in accordance with their best judgment.

 

No Appraisal Rights

 

Under Delaware law and under our certificate of incorporation, holders of Mobile Mini common stock are not entitled to appraisal rights with respect to the matters to be considered at the special meeting.

 

Other Information

 

Representatives of Ernst & Young LLP are not expected to be present at the special meeting.

 

Proposal One

 

Approval of the Merger Agreement and the Merger

 

Mobile Mini is asking its stockholders to consider and vote upon a proposal to authorize and approve the Merger Agreement, pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. Immediately after the merger, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini.

 

Proposal Two

 

Approval of an Amendment to Mobile Mini’s Certificate of Incorporation
to increase the number of Authorized Shares

 

Mobile Mini is seeking the approval of holders of common stock for an amendment to Mobile Mini’s certificate of incorporation to increase the number of authorized shares of preferred stock, par value $0.01 per share, from 5,000,000 shares to 20,000,000 shares and a corresponding increase to Mobile Mini’s total number of authorized shares of capital stock from 100,000,000 shares to 115,000,000 shares. The authorized number of shares of common stock would remain unchanged at 95,000,000 shares.

 

The amendment is required under the terms of the Merger Agreement and is necessary to enable Mobile Mini to have enough shares of authorized preferred stock to issue shares of preferred stock in connection with the merger. Accordingly, if this proposal is not approved by stockholders at the special meeting, a condition to the closing of the merger will not be satisfied and the merger will not be consummated. If this proposal is approved by stockholders and the merger is consummated, Mobile Mini will have the ability to issue an additional 11,444,444 shares of preferred stock in the future.

 

Proposal Three

 

Approval of an Amendment to Mobile Mini’s Certificate of Incorporation
to authorize the Designation of Series A Convertible
Redeemable Participating Preferred Stock

 

Mobile Mini is seeking the approval of holders of common stock for an amendment to Mobile Mini’s certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock.

 

The amendment authorizing the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock is required under the terms of the Merger Agreement and is necessary to enable Mobile Mini to issue such shares of preferred stock in connection with the merger. Accordingly, if this proposal is not approved by stockholders at the special meeting, a condition to the closing of the merger will not be satisfied and the merger will not be consummated. The amendment, if approved by Mobile Mini’s stockholders, would authorize Mobile Mini to issue 8,555,556 shares of preferred stock.

 

Summary of the terms of the Series A Convertible Redeemable Participating Preferred Stock

 

The following is a summary of the material provisions of the certificate of designation which is included as Exhibit D to Annex A, and is incorporated by reference into this proxy statement. This summary describes the material provisions of the Series A Convertible Redeemable Preferred Stock. We encourage you to read the certificate of designation carefully.

 

Ranking.  The preferred stock will, with respect to dividend rights, rights upon a liquidity event, rights to any other distributions or payments with respect to capital stock, voting rights and all other rights and preferences, rank junior to each other class or series of capital stock of Mobile Mini other than (i) in all respects all classes or series of

common stock existing or created after the date hereof, (ii) with respect to any other class or series of capital stock which by its terms ranks junior to the preferred stock, it shall rank senior to each such series of capital stock, (iii) with respect to dividends and voting rights, it shall rank pari passu with the common stock, and (iv) with respect to a distribution upon the occurrence of a liquidity event it shall rank senior to the common stock.

 

Dividends.  Holders of record of shares of preferred stock shall be entitled to receive when, as and if, declared by the Board of Directors of Mobile Mini, out of funds legally available therefor, cash dividends payable on shares of the preferred stock at the same time as cash dividends are paid on shares of common stock (and in the same manner and amount as if such shares of the preferred stock had been converted into shares of common stock at the time of such cash dividends).

 

Preference Upon a Liquidity Event.  The preferred stock to be issued in connection with the merger will have an aggregate liquidation preference of $154 million, assuming no unpaid dividends. Upon the occurrence of a Liquidity Event, each holder of shares of preferred stock then outstanding shall be entitled to be paid out of the assets of Mobile Mini legally available for distribution to its stockholders, a per share amount on such date equal to the greater of (i) $18.00 per share of preferred stock (as adjusted to reflect stock splits, stock dividends, stock combinations, recapitalizations an like occurrences) (such amount referred to as the original liquidation preference) plus all declared and unpaid dividends per each share of preferred stock and (ii) the amount such holder would be entitled to receive if each share of preferred stock held by it were converted at the Conversion Rate then in effect into shares of common stock immediately prior to the occurrence of such Liquidity Event before any payment is made to the holders of common stock or any other class or series of capital stock ranking junior to the preferred stock. For example, if Mobile Mini has no declared and unpaid dividends and files for bankruptcy, the amount per share that each holder of shares of preferred stock will receive would be $18.15, assuming a conversion price of $18.15 and further assuming that sufficient funds would be available for such payments at that time. The amount to be received by such holders of shares of preferred stock is referred to as the Series A Liquidation Preference.

 

“Conversion Rate” means the rate at which shares of Series A Convertible Redeemable Participating Preferred Stock may be converted into shares of common stock, as determined by dividing the original liquidation preference by the conversion price, which shall initially be $18.00 and shall be subject to adjustments under the terms of the certificate of designation.

 

“Liquidity Event” means a voluntary or involuntary filing of bankruptcy of Mobile Mini or any liquidation, dissolution or winding up of Mobile Mini (but shall not include the sale of Mobile Mini).

 

Voting Rights.  Each holder of the preferred stock will be entitled to vote, voting together with the holders of common stock as a single class, on all matters on which holders of common stock are entitled to vote, on an as-converted basis.

 

Optional Conversion.  Each share of preferred stock will be convertible into such number of shares of Mobile Mini common stock as is determined by dividing the original liquidation preference by the conversion price, which shall initially be $18.00, subject to adjustment from time to time as provided in the certificate of designation.

 

Holder Optional Redemptions.  (a) At any time after the tenth anniversary of the issue date, at the written election of the holders of a majority of the then outstanding shares of the preferred stock (referred to as the Majority Holders), Mobile Mini shall redeem all of the shares of preferred stock then outstanding on the date specified by the Majority Holders for an amount per share equal to the Series A Liquidation Preference. If the funds of Mobile Mini legally available for the redemption of shares of preferred stock are insufficient to permit the payment of the amounts due to such holders, then the holders of preferred stock shall share in any legally available funds pro rata based on the number of shares of preferred stock held by each such holder. Until all required payments have been made, (i) Mobile Mini shall use commercially reasonable efforts to obtain the funds and/or make funds legally available as necessary to make the required remaining payments, (ii) the number of directors on the Board of Directors of Mobile Mini shall be increased by 1 and the Majority Holders shall have the right to appoint the 1 additional director and (iii) the amount of the required remaining payments shall accrue interest at a rate of 10% per annum, compounded quarterly, until the remaining payments are paid in full.

 

(b) If Mobile Mini enters into a binding agreement in respect of a sale of Mobile Mini (x) on or prior to June 22, 2008, (y) on or prior to the date that is 90 days after the issue date and the negotiations in connection with

such sale commenced prior to the issue date, or (z) after the date which is 90 days after the issue date, and in any such case the per-share purchase price of the common stock in connection with such sale is less than $23.00 per share, then at the written election of the Majority Holders, Mobile Mini shall redeem all of the shares of preferred stock then outstanding at a price per share equal to (i) in the case of clauses (x) or (y) above, $21.60 per share, and (ii) in the case of clause (z) above, the original liquidation preference plus declared but unpaid dividends.

 

Corporation Optional Redemption.  Subject to the rights of the holders described in paragraph (b) above under “Holder Optional Redemptions,” Mobile Mini may redeem all of the shares of preferred stock then outstanding simultaneously with the consummation of a sale of Mobile Mini in which the per share purchase price of the common stock in connection with such sale is less than $23.00 per share for an amount per share equal to the original liquidation preference plus declared but unpaid dividends.

 

Mandatory Conversion.  The preferred stock will be mandatorily convertible into Mobile Mini common stock if (x) after the first anniversary of the issuance of the preferred stock, Mobile Mini’s common stock trades above $23.00 per share for a period of 30 consecutive trading days or (y) Mobile Mini enters into a binding agreement in respect of a sale of Mobile Mini in which the per-share purchase price of the common stock is less than $23.00 per share and the Majority Holders did not exercise the optional redemption described above.

 

Proposal Four

 

Approval of the Issuance of 8,555,556 Shares of Series A Convertible
Redeemable Participating Preferred Stock

 

Mobile Mini is seeking the approval of holders of common stock for the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock in connection with the merger.

 

These shares, convertible initially into approximately 8,555,556 million shares of Mobile Mini common stock, represent approximately 24.7%, at December 31, 2007, of our common stock outstanding before the completion of the merger. The issuance of the preferred stock in connection with the merger requires the approval of holders of Mobile Mini under NASDAQ Stock Market rules because the number of shares of common stock into which the preferred stock is convertible is in excess of 20% of the number of shares of common stock currently outstanding. Accordingly, if this proposal is not approved by stockholders at the special meeting, a condition to the closing of the merger will not be satisfied and the merger will not be consummated.

 

Proposal Five

 

Approval of Adjournments or Postponements of the Special Meeting

 

Mobile Mini is asking holders of common stock to approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals.

 

Approval of Proposal 5 is not a condition to the completion of the merger.

Proposal Six

 

Approval of an Amendment to Mobile Mini’s Certificate of Incorporation
to Authorize the Board of Directors of Mobile Mini to Determine Terms of Preferred Stock

 

Mobile Mini is seeking the approval of holders of common stock for an amendment to Mobile Mini’s certificate of incorporation to provide that authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time.

 

The amendment will provide Mobile Mini with increased financial flexibility in meeting future capital requirements, as it will allow preferred stock to be available with such features as determined by the Board of Directors of Mobile Mini for any proper corporate purpose without further stockholder approval. It is anticipated that such purposes may include the issuance of preferred stock for cash as a means of obtaining capital for use by Mobile Mini, or issuance as part or all of the consideration required to be paid by Mobile Mini for acquisitions of other businesses or assets. This amendment is not being proposed as a means of preventing or dissuading a hostile or coercive change in control or takeover of Mobile Mini. However, the preferred stock could be used for such a purpose. If preferred stock were to be issued (i) in connection with a stockholder rights plan, also known as a “poison pill” plan, or (ii) to purchasers supporting the Board of Directors of Mobile Mini in resisting a specific takeover proposal, such issuance could have the effect of delaying or preventing a change of control of Mobile Mini by increasing the number of outstanding shares entitled to vote and by increasing the number of votes required to approve a change of control of Mobile Mini.

 

Approval of Proposal 6 is not a condition to the completion of the merger.

 

As a participant in the portable storage industry, the management of Mobile Mini is generally familiar with Mobile Storage Group’s business and has met and meets from time to time with other portable storage companies (including Mobile Storage Group) at industry conferences and similar events. On an ongoing basis, Mobile Mini’s senior management reviews Mobile Mini’s business strategy and evaluates options for achieving Mobile Mini’s long-term strategic goals and enhancing stockholder value. In connection with these reviews, Mobile Mini’s management, periodically, has evaluated potential acquisitions that would further Mobile Mini’s growth strategy, enhance its geographic distribution, strengthen its access to valued customers and enhance its leading position in the portable storage solution industry in the US and the UK.

 

Mobile Mini has had prior dialogue with Mobile Storage Group with respect to a potential business combination. Mobile Mini initially engaged in discussions with Mobile Storage Group as it considered the importance of being a leading global provider of portable storage solutions both inside and outside the US. Mobile Mini examined the geographic footprint of its activities and considered that a potential combination with Mobile Storage Group could position it to cover more major markets for portable storage in the US and the UK. Mobile Mini also looked for opportunities to generate cost synergies. In 2005, prior to the acquisition of Mobile Storage Group by WCAS, Mobile Mini’s management met with and had preliminary discussions with Mobile Storage Group’s owners and management to determine Mobile Mini’s potential interest in exploring a business combination with Mobile Storage Group. These discussions between Mobile Mini and Mobile Storage Group did not proceed beyond the stage of preliminary meetings and dialogue on this topic, due to differences regarding Mobile Storage Group’s preliminary valuation and Mobile Mini’s analysis of the level of potential operating synergies, cost savings and additional debt that would result from that potential combination. There were no other discussions with third parties regarding possible material strategic alternatives with such third parties.

 

On October 30, 2007, at the request of WCAS, the majority stockholder of Mobile Storage Group, Mobile Mini’s senior management and representatives of WCAS met in Chandler, Arizona. During this initial meeting, WCAS’s representatives and Mobile Mini’s senior management discussed in general terms the respective businesses of Mobile Storage Group and Mobile Mini and prospects for the industry. During the course of these discussions, WCAS’s representatives and Mobile Mini’s senior management had the opportunity to discuss possible business relationships between the two companies, including a possible business combination, and exchanged preliminary views regarding the potential strategic fit of the two organizations and the complementary nature of their service and product offerings. In addition, WCAS’s representatives and Mobile Mini’s senior management had high level discussions on the strategic merits of a business combination including potential synergies. The potential synergies discussed included the potential to generate cost savings from overlap in corporate functions and branch infrastructure. These initial discussions contemplated potential cost savings but such savings were not quantified during these initial discussions. Both parties also recognized the possibility of other potential strategic merits of a business combination, including the expanded geographic footprint and customer base a combination of the two companies would provide. Terms of a potential combination of Mobile Mini and Mobile Storage Group were not discussed at this meeting, but it was agreed that, as a follow up to this meeting, WCAS would provide Mobile Mini with an outline of a transaction structure to effect a business combination.

 

Following this initial discussion with WCAS, Mobile Mini contacted Oppenheimer, Mobile Mini’s financial advisor, to request Oppenheimer’s assistance with Mobile Mini’s review of the forthcoming proposal from WCAS. Additionally, Mobile Mini’s senior management discussed with the Board of Directors of Mobile Mini the meeting with WCAS and the prospect of a potential business combination with Mobile Storage Group.

 

On November 16, 2007, Mobile Mini received a preliminary proposal for discussion purposes from Mobile Storage Group’s financial advisor, Lehman Brothers, Inc. (hereinafter referred to as Lehman), and WCAS, which included potential transaction terms and a potential structure for a prospective business combination. According to the terms of such preliminary proposal, Mobile Storage Group would merge into Mobile Mini in a transaction valued at approximately $750 million. Under the terms of such proposal, Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of shares of Mobile

Mini convertible preferred stock having a face value of $222.9 million, a conversion price of $19.50 per share and a 5% payable in-kind dividend and the assumption by Mobile Mini of the outstanding debt of Mobile Storage Group, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 24%, assuming conversion of Mobile Mini preferred stock. At the time of this initial proposal, on November 16, 2007, Mobile Mini’s stock price closed at $18.40 per share.

 

During the four weeks following this initial proposal, Mobile Mini and Mobile Storage Group exchanged revised proposals focusing on transaction value and deal structure regarding the potential combination of Mobile Mini and Mobile Storage Group. During this period, Mobile Mini enlisted Deutsche Bank Securities Inc. (hereinafter DB Securities) to act as a financial advisor to Mobile Mini in addition to Oppenheimer. DB Securities advised Mobile Mini in connection with certain terms and conditions of the transaction. DB Securities was not asked to, and did not, provide an opinion with respect to the fairness of the transaction. In addition to its role as a financial advisor to Mobile Mini, DB Securities is one of the financial institutions providing Mobile Mini with debt financing to complete the Merger, see “The Merger — Financing.”

 

On November 29, 2007, Mobile Mini provided a counterproposal to WCAS and Mobile Storage Group. According to the terms of such counterproposal, Mobile Storage Group would merge into Mobile Mini in a transaction valued at approximately $715 million and Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of a combination of 5.9 million shares of Mobile Mini common stock and $75 million in cash and the assumption by Mobile Mini of approximately $535 million of outstanding debt of Mobile Storage Group (hereinafter referred to as the “MSG Debt”), which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 15%.

 

On December 2, 2007, Mobile Storage Group submitted a further revised proposal providing for a transaction valued at approximately $735 million pursuant to which Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for a consideration consisting of approximately 10.5 million shares of Mobile Mini common stock valued at $19.00 per share and the assumption by Mobile Mini of the MSG Debt, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 23%.

 

On December 4, 2007, Mobile Mini submitted a further revised proposal, providing for a transaction valued at approximately $685 million in which Mobile Mini removed the $75 million cash component of the merger consideration from its prior offer and proposed that Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of 7.9 million shares of Mobile Mini common stock valued at $19.00 per share and the assumption by Mobile Mini of the MSG Debt, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 18%.

 

After the discussions with WCAS had commenced, Mobile Mini’s senior management regularly apprised the Board of Directors of Mobile Mini of its discussions with WCAS and Mobile Storage Group, reviewing the potential strategic rationale for the combination and discussing the terms and overall structure of the proposed transaction.

 

On December 6, 2007, Mobile Mini and Mobile Storage Group discussed terms and structure for a potential business combination pursuant to which Mobile Storage Group would merge into Mobile Mini in a transaction valued at $715 million. Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of a combination of 8.5 million shares of Mobile Mini common stock valued at $20.00 per share and $12.5 million in cash and the assumption by Mobile Mini of the MSG Debt, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 20%. On December 6, 2007, Mobile Mini’s stock price closed at $20.49 per share.

 

On December 12, 2007, Mobile Mini, Mobile Storage Group and WCAS met to discuss an agenda for management presentations and due diligence meetings scheduled for December 19 and 20, 2007 in Phoenix, Arizona.

 

On December 14, 2007, the companies finalized and memorialized in a non-binding term sheet the terms discussed on December 6, 2007 and Mobile Mini, Mobile Storage Group and WCAS executed a mutual confidentiality agreement.

On December 17, 2007, White & Case LLP, outside counsel to Mobile Mini, and Kirkland & Ellis LLP, outside counsel to Mobile Storage Group, together with Oppenheimer, DB Securities and Lehman, met telephonically to discuss the scope of a proposed merger agreement.

 

On December 19 and 20, 2007, Mobile Mini, Mobile Storage Group and WCAS met in Phoenix to further discuss potential synergies and commence due diligence efforts. The companies discussed that of the approximately $25 million of expected cost savings from overlap in corporate functions and branch infrastructure, approximately 51% would come from combining corporate offices in the US and the UK and approximately 49% would come from consolidating certain branch locations, and approximately 82% would be realized in the US while approximately 18% would be realized in the UK. The companies’ financial advisors were also present at this meeting.

 

On December 26, 2007, extensive and detailed financial, operational and legal due diligence was commenced by each of Mobile Mini and Mobile Storage Group regarding the other. This due diligence continued through the execution of the definitive Merger Agreement on February 22, 2008.

 

On December 28, 2007, White & Case LLP, on behalf of Mobile Mini, distributed an initial draft of the Merger Agreement to Mobile Storage Group and Kirkland & Ellis LLP.

 

On January 3, 2008, Mobile Mini, Mobile Storage Group and WCAS met in Phoenix to discuss Mobile Mini’s business and operations for due diligence purposes. The companies’ financial advisors also participated in this meeting.

 

On January 8, 2008, WCAS and Mobile Storage Group provided an issues list on the draft Merger Agreement. WCAS and Mobile Storage Group proposed to make reciprocal a number of representations and warranties and covenants of Mobile Storage Group in the draft Merger Agreement. In addition, WCAS and Mobile Storage Group proposed revising the Mobile Mini common stock component of the merger consideration, which as originally agreed to provided for a fixed number of shares, and requested a “purchase price protection” mechanism, or collar, that would allow for an increase in the number of shares of Mobile Mini’s common stock to be received by the stockholders of Mobile Storage Group in the event Mobile Mini’s stock did not trade at a price of $19.00 or higher. On January 8, 2008, at the time of this additional request by Mobile Storage Group, Mobile Mini common stock price closed at $16.31 per share, significantly below the Mobile Mini common stock closing price of $20.49 per share on December 6, 2007.

 

On January 8, 2008, White & Case LLP and Kirkland & Ellis LLP discussed certain provisions of the draft Merger Agreement.

 

On January 10, 2008, WCAS, Mobile Storage Group, Mobile Mini and their respective financial advisors began conversations regarding alternative structures for the transaction in light of the decline in Mobile Mini’s stock price since December 6, 2007. In the course of these discussions, Mobile Mini rejected any “purchase price protection” mechanism and WCAS proposed to address the issue by changing the common stock portion of the merger consideration to a convertible preferred security.

 

On January 14, 2008, Mobile Mini provided a revised proposal to Mobile Storage Group and WCAS. The proposal rejected the convertible preferred security and instead suggested adding “contingent value rights” or “CVRs” as a component to the merger consideration for Mobile Storage Group stockholders to address the decline in transaction value caused by Mobile Mini’s stock price decline.

 

On January 14, 2008, White & Case LLP and Kirkland & Ellis LLP discussed telephonically certain provisions of the draft Merger Agreement.

 

On January 15, 2008, Mobile Mini’s senior management, with the assistance of Mobile Mini’s legal and financial advisors, updated the Board of Directors of Mobile Mini on the ongoing discussion regarding deal structure and proposed merger consideration, including the “purchase price protection” mechanism requested by WCAS and Mobile Mini’s counterproposal of issuing CVRs. The Board of Directors of Mobile Mini also received an update on Mobile Mini’s ongoing due diligence on Mobile Storage Group and outstanding issues on the draft Merger Agreement.

Thereafter, within the following two weeks, Mobile Mini, WCAS and Mobile Storage Group, together with their respective financial advisors, held various telephone conversations to discuss and further explain their respective proposals regarding the merger consideration and transaction structure for the business combination of the two companies. These telephone conversations, however, did not result in any change to the terms of such proposals, due in part to the volatility of Mobile Mini’s stock.

 

On January 29, 2008, Mobile Storage Group and WCAS provided a revised proposal. Under the terms of the revised proposal, Mobile Storage Group would merge into Mobile Mini and Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for a revised consideration consisting of a combination of $12.5 million in cash and shares of convertible preferred stock of Mobile Mini with an aggregate liquidation preference of $140 million, a conversion price of $18.00 per share, and no dividend, and the assumption by Mobile Mini of the MSG Debt, which would result in fully diluted ownership of the Mobile Storage Group stockholders in Mobile Mini of approximately 18.2%, assuming conversion of Mobile Mini’s preferred stock. In addition, the revised proposal from Mobile Storage Group contemplated the issuance to Mobile Storage Group stockholders of five million Mobile Mini common stock options in three tranches of options with strike prices of $20.00, $25.00 and $30.00.

 

On February 1, 2008, Mobile Mini submitted a counterproposal to the Mobile Storage Group and WCAS January 29, 2008 proposal, pursuant to which Mobile Storage Group would merge into Mobile Mini and Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group in a transaction valued at approximately $700.5 million, for consideration consisting of a combination of $12.5 million in cash, Mobile Mini convertible preferred shares with a liquidation preference of $153 million, a conversion price of $18.00 per share and no dividend, and 8.5 million CVRs valued at a maximum of $17 million, and the assumption by Mobile Mini of the MSG Debt, which would result in fully diluted ownership of the Mobile Storage Group stockholders in Mobile Mini of approximately 19.7%, assuming conversion of Mobile Mini’s preferred stock. For the next two days, Mobile Mini and Mobile Storage Group continued negotiating the form and amount of the merger consideration and material contract terms.

 

On February 3, 2008, Mobile Mini and Mobile Storage Group continued to discuss a revised deal structure and finally agreed to a revised deal structure with a transaction value of $701.5 million and merger consideration consisting of $12.5 million in cash and Mobile Mini convertible preferred shares with a liquidation preference of $154 million, a conversion price of $18.00 per share and no dividend, and the assumption by Mobile Mini of the MSG Debt, which would result in fully diluted ownership of the Mobile Storage Group stockholders in Mobile Mini of approximately 19.1%, assuming conversion of Mobile Mini preferred stock.

 

From February 3, 2008 through February 22, 2008, Mobile Mini, Mobile Storage Group and their respective advisors engaged in numerous conference calls and discussions on the terms of the Merger Agreement. To reflect the progress of these discussions and negotiations, on February 10, 2008, White & Case LLP, on behalf of Mobile Mini, circulated a revised Merger Agreement to Kirkland & Ellis LLP, WCAS and Mobile Storage Group. On February 19, 2008, Kirkland & Ellis LLP, on behalf of Mobile Storage Group, circulated a further revised Merger Agreement to White & Case LLP and Mobile Mini.

 

During the week of February 11, 2008, White & Case LLP, on behalf of Mobile Mini, circulated initial drafts of the form joinder agreement, the forms of stockholders agreement, escrow agreement and certificate of designation for Mobile Mini’s preferred stock, all of which were negotiated by Mobile Mini and Mobile Storage Group and their respective legal advisors in the following days until the execution of the Merger Agreement on February 22, 2008.

 

On February 11, 2008, the Board of Directors of Mobile Mini reviewed and discussed the transaction with Mobile Mini’s senior management and advisors.

 

On February 20, 2008, Mobile Mini’s senior management and advisors updated the Board of Directors of Mobile Mini on the status of the final negotiations and discussions with Mobile Storage Group.

 

On February 21, 2008, the Board of Directors of Mobile Mini met and was presented with the proposed Merger Agreement and ancillary agreements for approval. At that meeting, Mobile Mini’s senior management and legal and financial advisors reviewed with the Board of Directors of Mobile Mini the transaction and related matters. During this meeting, Oppenheimer reviewed with the Board of Directors of Mobile Mini its financial analysis of the

aggregate merger consideration to be paid in the merger by Mobile Mini and rendered to the Board of Directors of Mobile Mini an oral opinion, which was confirmed by delivery of a written opinion dated February 21, 2008, to the effect that, as of that date and based on and subject to the matters described in the opinion, the aggregate merger consideration to be paid in the merger by Mobile Mini was fair, from a financial point of view, to Mobile Mini. The Board of Directors of Mobile Mini discussed with Mobile Mini’s management the financial forecasts relating to Mobile Mini and Mobile Storage Group on a combined basis that were provided to Oppenheimer by Mobile Mini’s management and, based on those discussions, believed Oppenheimer’s reliance upon those forecasts was reasonable. After deliberation, the Board of Directors of Mobile Mini unanimously determined that the transactions contemplated in the Merger Agreement and in the ancillary agreements, are advisable, fair to and in the best interest of Mobile Mini and its stockholders. The Board of Directors of Mobile Mini then unanimously approved the Merger Agreement and the ancillary agreements and resolved to recommend to Mobile Mini stockholders the approval and adoption of the Merger Agreement and the ancillary agreements.

 

On February 22, 2008, Mobile Mini and Mobile Storage Group executed the Merger Agreement and Mobile Mini and certain stockholders of Mobile Storage Group executed the joinder agreement. Prior to the open of the market on February 22, 2008, Mobile Mini issued a press release announcing the Merger Agreement entered into with Mobile Storage Group.

 

In evaluating the merger, the Board of Directors of Mobile Mini consulted with our senior management and our legal and financial advisors. In reaching its decision to approve and adopt the Merger Agreement and recommend that our stockholders vote “FOR” approval and adoption of the Merger Agreement and the merger, the Board of Directors of Mobile Mini considered the following material factors:

 

 

 

 

 

 

The Board of Directors of Mobile Mini also considered potential risks and costs relating to the merger, including:

 

 

The foregoing discussion addresses certain material information and factors considered by the Board of Directors of Mobile Mini in its consideration of the merger, including factors that support the merger as well as those that may weigh against it. In view of the variety of factors and the quality and amount of information considered, the Board of Directors of Mobile Mini did not find it practicable to, and did not make specific assessments of, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination. In addition, the Board of Directors of Mobile Mini did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate determination. The determination to approve the merger was made after consideration of all of the factors in the aggregate. In addition, individual members of the Board of Directors of Mobile Mini may have given different weights to different factors.

 

The actual benefits from the merger, costs of integration and ability to achieve expected synergies could differ materially from the estimates and expectations discussed above. Accordingly, the potential benefits described above or the potential benefits described in this proxy statement may not be realized.

 

Mobile Mini has engaged Oppenheimer as its financial advisor in connection with the merger. In connection with this engagement, Mobile Mini requested that Oppenheimer evaluate the fairness, from a financial point of view, to Mobile Mini of the aggregate consideration to be paid in the merger by Mobile Mini. On February 21, 2008, at a telephonic meeting of the Board of Directors of Mobile Mini held to evaluate the merger, Oppenheimer rendered to the Board of Directors of Mobile Mini an oral opinion, which was confirmed by delivery of a written opinion, dated February 21, 2008, to the effect that, as of that date and based on and subject to the matters described in its opinion, the aggregate consideration to be paid in the merger by Mobile Mini was fair, from a financial point of view, to Mobile Mini.

 

The full text of Oppenheimer’s written opinion, dated February 21, 2008, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached to this proxy statement as Annex B. Oppenheimer’s opinion was provided to the Board of Directors of Mobile Mini in connection with its evaluation of the aggregate consideration from a financial point of view to Mobile Mini. Oppenheimer’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matters relating to the merger. The summary of Oppenheimer’s opinion described below is qualified in its entirety by reference to the full text of its opinion.

 

In arriving at its opinion, Oppenheimer:

 

 

In rendering its opinion, Oppenheimer relied upon and assumed, without independent verification or investigation, the accuracy and completeness of all of the financial and other information provided to or discussed with Oppenheimer by Mobile Mini, Mobile Storage Group and their respective employees, representatives and affiliates

or otherwise reviewed by Oppenheimer. Mobile Mini was not provided with financial forecasts for Mobile Services or Mobile Storage Group prepared by the management of Mobile Storage Group beyond calendar year 2008. In addition, based on the assessments of Mobile Mini’s management as to the likelihood of achieving the financial results reflected in the financial forecasts provided by Mobile Storage Group’s management for calendar year 2008, Oppenheimer was directed by Mobile Mini’s management not to rely upon those financial forecasts for purposes of its analyses, and further was advised by Mobile Mini’s management that financial forecasts for Mobile Services or Mobile Storage Group on a standalone basis were not prepared by Mobile Mini’s management. Accordingly, with Mobile Mini’s consent, Oppenheimer did not undertake an analysis of the financial performance of Mobile Storage Group on a standalone basis beyond calendar year 2007. With respect to the draft unaudited financial statements of Mobile Services and Mobile Storage Group for fiscal year ended December 31, 2007, prepared by Mobile Storage Group’s management (as adjusted by Mobile Mini’s management in the case of the draft unaudited financial statements of Mobile Services), Oppenheimer was advised and, at Mobile Mini’s direction, assumed, without independent verification or investigation, that the financial statements (including the adjustments) were reasonably prepared on bases reflecting the best available information, estimates and judgments of the managements of Mobile Storage Group and Mobile Mini, as the case may be, and further assumed that the draft unaudited financial statements of Mobile Services and Mobile Storage Group for fiscal year ended December 31, 2007, when completed, would not vary materially from the unaudited financial statements for such fiscal year. With respect to the financial forecasts and estimates relating to Mobile Mini and Mobile Storage Group on a combined basis utilized by Oppenheimer in evaluating certain potential pro forma financial effects of the merger on Mobile Mini (including estimates prepared by Mobile Mini’s management as to the potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger), Oppenheimer assumed, at Mobile Mini’s direction, without independent verification or investigation, that such forecasts and estimates were reasonably prepared on bases reflecting the best available information, estimates and judgments of Mobile Mini’s management as to the future financial condition and operating results of the combined company and such synergies and strategic benefits. Oppenheimer relied, at Mobile Mini’s direction, without independent verification or investigation, on the assessments of Mobile Mini’s management as to the ability of Mobile Mini to integrate the businesses of Mobile Mini and Mobile Storage Group. Oppenheimer assumed, with Mobile Mini’s consent, that the merger would be treated as a reorganization for federal income tax purposes. Representatives of Mobile Mini advised Oppenheimer, and Oppenheimer therefore also assumed, that the final terms of the Merger Agreement would not vary materially from those set forth in the draft reviewed by Oppenheimer. Oppenheimer further assumed, with Mobile Mini’s consent, that the merger would be consummated in accordance with its terms without waiver, modification or amendment of any material term, condition or agreement and in compliance with all applicable laws and other requirements and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no delay, limitation, restriction or condition would be imposed, that would have an adverse effect on Mobile Mini, Mobile Storage Group or the merger (including the contemplated benefits to Mobile Mini of the merger). Oppenheimer neither made nor obtained any independent evaluations or appraisals of the assets or liabilities, contingent or otherwise, of Mobile Mini or Mobile Storage Group.

 

Oppenheimer did not express any opinion as to the underlying valuation, future performance or long-term viability of Mobile Mini or Mobile Storage Group, the actual value of Mobile Mini preferred stock (or the shares of Mobile Mini common stock into which shares of Mobile Mini preferred stock are convertible) when issued or the prices at which Mobile Mini preferred stock or Mobile Mini common stock would trade or otherwise be transferable at any time. Oppenheimer expressed no view as to, and its opinion did not address, any terms or other aspects or implications of the merger (other than the aggregate consideration to the extent expressly specified in its opinion) or any aspect or implication of any other agreement, arrangement or understanding entered into in connection with the merger or otherwise, including, without limitation, the form or structure of the merger or the aggregate consideration, any adjustments to the aggregate consideration or the terms of Mobile Mini preferred stock. In addition, Oppenheimer expressed no view as to, and its opinion did not address, the fairness of the amount or nature of, or any other aspect relating to, the compensation to be received by any individual officers, directors or employees of any parties to the merger, or any class of such persons, relative to the aggregate consideration. Oppenheimer also expressed no view as to, and its opinion did not address, the underlying business decision of Mobile Mini to effect the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for Mobile Mini or the effect of any other transaction in which Mobile Mini might engage. Oppenheimer’s opinion was

necessarily based on the information available to it and general economic, financial and stock market conditions and circumstances as they existed and could be evaluated by Oppenheimer on the date of its opinion. Although subsequent developments may affect its opinion, Oppenheimer does not have any obligation to update, revise or reaffirm its opinion. The Company has advised Oppenheimer that the Company does not intend to obtain an updated opinion from Oppenheimer and, as such, no updated opinion will be obtained.

 

The summary below of the financial analyses performed by Oppenheimer in connection with its opinion is not a complete description of such analyses, but rather a summary of the material financial analyses performed by Oppenheimer in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. Oppenheimer arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion. Accordingly, Oppenheimer believes that its analyses and this summary must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Oppenheimer’s analyses and opinion.

 

In performing its analyses, Oppenheimer considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of Mobile Mini and Mobile Storage Group. No company, business or transaction used in the analyses is identical to Mobile Storage Group or the merger, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed. Accordingly, such analyses may not necessarily utilize all companies, businesses or transactions that could be deemed comparable to Mobile Storage Group or the merger.

 

The forecasts and estimates contained in Oppenheimer’s analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than those suggested by its analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, the forecasts and estimates used in, and the results derived from, Oppenheimer’s analyses are inherently subject to substantial uncertainty.

 

The type and amount of consideration payable in the merger were determined through negotiation between Mobile Mini and Mobile Storage Group, and the decision to enter into the transaction was solely that of the Board of Directors of Mobile Mini. Oppenheimer’s opinion and financial presentation were only one of many factors considered by the Board of Directors of Mobile Mini in its evaluation of the merger and should not be viewed as determinative of the views of the Board of Directors of Mobile Mini or management with respect to the merger or the aggregate consideration.

 

The following is a summary of the material financial analyses reviewed with the Board of Directors of Mobile Mini in connection with Oppenheimer’s opinion dated February 21, 2008. The financial analyses summarized below include information presented in tabular format. In order to fully understand Oppenheimer’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Oppenheimer’s financial analyses. For purposes of the “Selected Companies Analysis” and “Selected Precedent Transactions Analysis” summarized below, the “illustrative market value of the aggregate consideration” refers to an illustrative value of the aggregate consideration payable by Mobile Mini in the merger, assuming no purchase price adjustments, of $146.5 million based on the sum of the following:

 

 

 

References below to “adjusted” financial data of Mobile Storage Group relate to financial data of Mobile Storage Group for calendar year 2007 utilized in Oppenheimer’s financial analyses based on draft unaudited financial statements prepared by Mobile Storage Group’s management, as adjusted by Mobile Mini’s management for one-time professional fees and the pro forma full-year impact of acquisitions effected by Mobile Storage Group in 2007 and January 2008, certain operating improvements experienced by Mobile Storage Group in the second half of 2007 and certain accounting adjustments.

 

Selected Companies Analysis

 

Oppenheimer reviewed financial and stock market information for the five selected companies set forth below. These companies were selected primarily because they are publicly traded companies in the equipment rental services industry, which is the industry in which Mobile Storage Group operates, with rental asset and other business characteristics generally similar to those of Mobile Storage Group and which, in Oppenheimer’s view, were deemed relevant for purposes of comparison. Among these companies, Oppenheimer focused in particular on Mobile Mini and McGrath RentCorp, both of which engage, as does Mobile Storage Group, in the specialty rental services segment of the equipment rental services industry.

 

 

Oppenheimer reviewed, among other things, enterprise values of the selected companies, calculated as fully-diluted market value based on closing stock prices on February 20, 2008, plus debt, less cash, as multiples of latest 12 months (as of September 30, 2007) earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, and earnings before interest and taxes, referred to as EBIT. Financial data for the selected companies were based on public filings and other publicly available information.

 

Oppenheimer then applied to Mobile Storage Group’s calendar year 2007 adjusted EBITDA and adjusted EBIT a selected range of EBITDA multiples of 6.9x to 10.3x derived from Mobile Mini’s latest 12 months and five-year average historical latest 12 months EBITDA, respectively, and a selected range of EBIT multiples of 9.1x to 11.2x derived from McGrath RentCorp’s latest 12 months and five-year historical average latest 12 months EBIT, respectively. This analysis indicated the following implied equity reference range for Mobile Storage Group, as compared to the illustrative market value of the aggregate consideration:

 

 

Oppenheimer also applied Mobile Mini’s latest 12 months EBITDA multiple of 6.9x and McGrath RentCorp’s latest 12 months EBIT multiple of 9.1x to Mobile Storage Group’s calendar year 2007 adjusted EBITDA and adjusted EBIT, respectively, in each case after giving effect to potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger. This analysis indicated the following implied equity reference range for Mobile Storage Group, as compared to the illustrative market value of the aggregate consideration:

 

Selected Precedent Transactions Analysis

 

Oppenheimer reviewed, to the extent publicly available, financial information in the seven selected transactions set forth below announced since November 2005. These transactions were selected primarily because they involved target companies or businesses in the equipment rental services industry, which is the industry in which Mobile Storage Group operates, with rental asset and other business characteristics generally similar to those of Mobile Storage Group and which, in Oppenheimer’s view, were deemed relevant for purposes of comparison. Among these transactions, Oppenheimer focused in particular on transactions having transaction values of $150 million or more for which transaction multiples were publicly available, namely the Ristretto Group S.a.r.l./Williams Scotsman International, Inc. and WCAS/Mobile Storage Group, Inc. transactions.

 

 

Oppenheimer reviewed transaction values in the selected transactions, calculated as the equity value implied for the target company based on the consideration payable in the selected transaction, plus debt, less cash, as multiples of latest 12 months EBITDA and EBIT. Financial data for the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. Oppenheimer then applied to Mobile Storage Group’s calendar year 2007 adjusted EBITDA and adjusted EBIT a selected range of latest 12 months EBITDA and EBIT multiples of 9.4x to 9.6x and 14.8x to 15.1x, respectively, derived from the Ristretto Group S.a.r.l./Williams Scotsman International, Inc. and WCAS/Mobile Storage Group, Inc. transactions. This analysis indicated the following implied equity reference range for Mobile Storage Group, as compared to the illustrative market value of the aggregate consideration:

 

 

Accretion/Dilution Analysis

 

Oppenheimer reviewed the potential pro forma effect of the merger on Mobile Mini’s calendar years 2008 and 2009 estimated earnings per share, referred to as EPS, in each case after giving effect to potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger and before giving effect to expected integration costs, as more fully described above under the caption “Reasons for the Merger; Recommendation of the Board of Directors of Mobile Mini” beginning on page 30. Estimated financial data of the combined company were based on internal estimates of Mobile Mini’s management. Based on an assumed merger closing date of March 31, 2008, this analysis indicated that the merger could be accretive to Mobile Mini’s calendar years 2008 and 2009 estimated EPS by approximately 3.5% and 29.0%, respectively, relative to publicly available research analysts’ consensus EPS estimates for such years. Actual results may vary from projected results and the variations may be material.

Miscellaneous

 

Mobile Mini has agreed to pay Oppenheimer for its financial advisory services in connection with the merger an aggregate fee of approximately $4.5 million, $1.0 million of which was payable upon delivery of its opinion and approximately $3.5 million of which is contingent upon consummation of the merger. Mobile Mini also has agreed to reimburse Oppenheimer for its reasonable expenses, including reasonable fees and expenses of its legal counsel, and to indemnify Oppenheimer and related parties against liabilities, including liabilities under the federal securities laws, relating to, or arising out of, its engagement. In addition, the assignor of certain investment banking assets of Oppenheimer in the past performed investment banking and other services for Mobile Mini unrelated to the merger, for which services such assignor received compensation, including having acted as joint bookrunner for an offering of senior notes of Mobile Mini in May 2007 and as joint bookrunner for an offering of Mobile Mini common stock in March 2006. In the ordinary course of business, Oppenheimer and its affiliates may actively trade the securities of Mobile Mini and debt securities of Mobile Services for Oppenheimer’s and its affiliates’ own accounts and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.

 

The issuance of Oppenheimer’s opinion was approved by an authorized committee of Oppenheimer. Mobile Mini selected Oppenheimer as its financial advisor based on Oppenheimer’s reputation and experience. Oppenheimer is a nationally recognized investment banking firm and, as a part of its investment banking business, is regularly engaged in valuations of businesses and securities in connection with acquisitions and mergers, underwritings, secondary distributions of securities, private placements and valuations for other purposes.

 

As required by the stockholders agreement, upon consummation of the merger, Mobile Mini will expand the size of the Board of Directors of Mobile Mini to 8 from 6 and will appoint 2 directors designated by WCAS, to fill the vacancies.

 

WCAS has indicated that it will designate Michael E. Donovan and Sanjay Swani to serve as directors.

 

Michael E. Donovan previously served as a member of the Mobile Storage Group, Inc. Board of Directors since August 2006. Mr. Donovan joined WCAS, in 2001 and is currently a principal. Prior to joining WCAS, Mr. Donovan worked at Windward Capital Partners and the investment banking division of Merrill Lynch. Mr. Donovan currently serves on the Board of Directors of several privately-held companies, including Ozburn-Hessey Logistics Inc. and United Surgical Partners International Inc. Mr. Donovan graduated with a B.A. from Yale University in 1998.

 

Sanjay Swani previously served as a member of the Mobile Storage Group, Inc. Board of Directors since August 2006. Mr. Swani is a general partner of WCAS. Mr. Swani joined WCAS as a vice president in 1999 and became a general partner in 2001. Prior to joining WCAS, Mr. Swani worked at Fox Paine & Company, L.L.C. from June 1998 to May 1999 and was with Morgan Stanley & Co. Incorporated in their mergers & acquisitions area from 1994 to 1998 and in their debt capital markets area from 1988 to 1990. Mr. Swani has an undergraduate degree from Princeton University (1987) and graduate degrees from the MIT Sloan School of Management (1994) and Harvard Law School (1994). Mr. Swani currently serves on the Board of Directors of ITC DeltaCom, Inc. and several privately-held companies including Ozburn-Hessey Logistics, Inc., Venture Transport Logistics, L.L.C., and Global Knowledge Networks, Inc.

 

Upon completion of the merger, the executive management team of the combined company will include senior executives from Mobile Mini and from Mobile Storage Group. Steve Bunger will continue to serve as Chairman, President and Chief Executive Officer and Larry Trachtenberg will continue to serve as Chief Financial Officer. Doug Waugaman, CEO of Mobile Storage Group, is expected to join Mobile Mini as COO of Integration. Jody Miller, Bill Armstead, Ron Halchishak and Jeffrey Kluckman, senior executives at Mobile Storage Group, are expected to assume senior roles at Mobile Mini.

 

The consummation of the merger is conditioned upon all applicable waiting periods under HSR having expired or otherwise terminated. On March 5, 2008, Mobile Mini and Mobile Storage Group each filed HSR pre-merger notification and report forms with the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission for review in connection with the proposed merger. HSR provides for an initial 30-calendar-day waiting period following the necessary filings by the parties to the merger. The waiting period expired on Friday, April 4, 2008.

 

Mobile Mini intends to account for the merger as a purchase of Mobile Storage Group in accordance with generally accepted accounting principles in the United States. Mobile Storage Group will be treated as the acquired entity for such purposes. Accordingly, the aggregate fair value of the consideration paid by Mobile Mini in connection with the merger will be allocated to Mobile Storage Group’s assets based on their fair values as of the completion of the merger. The difference between the fair value of Mobile Storage Group’s assets, liabilities and other items and the aggregate fair value of the consideration paid by Mobile Mini will be recorded as goodwill and other assets and intangibles. The results of operations of Mobile Storage Group will be included in Mobile Mini’s consolidated results of operations only for periods subsequent to the completion of the merger.

 

For U.S. federal income tax purposes, Mobile Mini will not be entitled to allocate the aggregate fair market value of the consideration paid by Mobile Mini in connection with the merger with Mobile Storage Group to Mobile Storage Group’s assets. Instead, Mobile Mini will inherit the Mobile Storage Group’s tax basis in its assets and will not be able to increase that tax basis to reflect the value of the aggregate consideration paid or the fair market value of the assets. As a result, Mobile Mini’s tax-deductible depreciation of the former Mobile Storage Group assets will be less than if those assets had been purchased at the time of the merger for their fair value. In addition, in the event that Mobile Mini resells any of the former Mobile Storage Group assets, it will calculate taxable gain by reference to their tax basis.

 

Under Delaware law, Mobile Mini stockholders will not have appraisal rights pursuant to the merger and the other transactions contemplated by the Merger Agreement.

 

In anticipation of the merger, we have obtained a commitment letter, or the Commitment Letter, from Deutsche Bank Securities Inc., Deutsche Bank AG New York Branch, Bank of America Securities LLC, Bank of America, N.A., J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. (collectively, the “Commitment Parties”), dated February 22, 2008, with respect to a first lien senior secured revolving credit facility under which we may borrow up to $1.0 billion, subject to a borrowing base. We intend to use a portion of the proceeds from such credit facility to refinance our existing credit facility, to pay the cash portion of the merger consideration and the transaction costs related to the merger. The proceeds will also be used to refinance a portion of the approximately $535.0 million of the Mobile Storage Group indebtedness to be assumed in connection with the merger as well as amounts outstanding under our existing revolving credit facility. In connection with the Commitment Letter, we have agreed to pay to the Commitment Parties an underwriting fee upon closing of the merger. Such underwriting fee is included in the total transaction fees and expenses presented on page 62 and will not recur. In addition, we have agreed to pay to Deutsche Bank AG New York Branch an annual administration fee of $150,000 to act as administrative agent. We do not have any current plans to repay the credit facility.

 

The credit facility will have a U.S. facility and a U.K. subfacility. Mobile Mini and certain of its U.S. subsidiaries will be borrowers under the U.S. facility and the U.S. facility will be guaranteed by substantially all U.S. subsidiaries that are not borrowers. The U.K. subsidiaries will be borrowers under the U.K. subfacility, and Mobile Mini and substantially all other subsidiaries that are not U.K. borrowers will be guarantors of the U.K. subfacility. The U.S. facility will be secured by a first priority lien on substantially all assets of the U.S. borrowers

and U.S. guarantors. The U.K. subfacility will be secured by a first priority lien on substantially all of the assets of Mobile Mini and its subsidiaries.

 

The credit facility will have a term of five years from the date of the execution and delivery of the definitive financing agreement and related documentation. The U.K. subfacility will have a borrowing limit of not more than $200 million, and borrowings under such facility may be made in Pounds Sterling or Euros. The availability of borrowings under the credit facility will be subject to a borrowing base calculated as a discount to the value of certain pledged collateral. The credit facility will include an uncommitted incremental credit facility of up to $250.0 million. The credit facility will contain optional and mandatory prepayment provisions consistent with our existing revolving credit facility, with such modifications as may be appropriate given the merger and the related transactions.

 

Borrowings under the credit facility will bear interest at a rate equal to, at our option, either (a) LIBOR plus an applicable margin or (b) the prime rate plus an applicable margin. We expect that the initial applicable margin for borrowings will be 1.00% with respect to prime rate borrowings and 2.50% with respect to LIBOR borrowings, in each case subject to adjustment pursuant to a “market flex” provision. The applicable margins may adjust from time to time based on our leverage ratio. In addition to paying interest on outstanding principal under the credit facility, we will be required to pay an unused line fee to the lenders under the revolving credit facilities in respect of the unutilized commitments thereunder. The unused line fee rate is 0.375% per annum if the unused amount is less than or equal to 50% of the aggregate commitments or 0.25% per annum if the unused amount is greater than 50%. We must also pay customary letter of credit fees.

 

The commitments of the banks under the Commitment Letter are subject to, among other things, the consummation of the merger on or before August 15, 2008, and other conditions customary in transactions of this sort, including that since December 31, 2006, there has occurred no event, fact or circumstance that has caused or could reasonably be expected to have a material adverse effect on Mobile Mini, and since September 30, 2007, there has occurred no event, fact or circumstance that has caused or could reasonably be expected to cause a material adverse effect on Mobile Storage. We anticipate that the definitive financing agreement will include (i) representations and warranties, covenants and events of default consistent with our existing revolving credit facility, with such modifications as may be appropriate given the merger and the related transactions, (ii) financial maintenance covenants consisting of maximum leverage ratio, minimum fixed charge coverage ratio and minimum utilization rate, each of which shall only be tested if excess availability under our borrowing base is less than the greater of (a) $100.0 million and (b) 10% of the total commitments under the credit facility and (iii) customary indemnities for the lenders under the credit facilities.

 

The following summary describes the material provisions of the Merger Agreement. This summary may not contain all of the information about the Merger Agreement that is important to you and is qualified in its entirety by reference to the Merger Agreement, which is included as Annex A to this proxy statement. We urge you to read the entire Merger Agreement and the other annexes to this proxy statement carefully and in their entirety.

 

The Merger Agreement has been included to provide you with information regarding its terms. The terms and information in the Merger Agreement should not be relied on as disclosure about Mobile Mini, Cactus Merger Sub, Inc. or Mobile Storage Group without consideration of the information provided elsewhere in this document and in the documents incorporated by reference into this document, including the periodic and current reports and statements that Mobile Mini files with the Securities and Exchange Commission. The terms of the Merger Agreement (such as the representations and warranties) govern the contractual rights and relationships, and allocate risk, among the parties in relation to the merger. In particular, the representations and warranties made by the parties to each other in the Merger Agreement have been negotiated among the parties with the principal purpose of setting forth their respective rights with respect to their obligation to close the merger should events or circumstances change or be different from those stated in the representations and warranties. Matters may change from the state of affairs contemplated by the representations and warranties. None of Mobile Mini, Cactus Merger Sub, Inc. or Mobile Storage Group undertakes any obligation to publicly release any revisions to the representations and warranties, except as required under U.S. federal or other applicable securities laws.

 

Structure of the Merger

 

On February 22, 2008, we entered into the Merger Agreement with Cactus Merger Sub, Inc., a wholly-owned subsidiary of Mobile Mini, MSG WC Holdings Corp., and WCAS, as representative of the stockholders of MSG WC Holdings Corp., pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. Immediately after the merger, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini.

 

Cancellation of Stock held by Stockholders of Mobile Storage Group.  Each share of Mobile Storage Group’s common stock issued and outstanding immediately prior to the effective time of the merger and held by the stockholders of Mobile Storage Group, and all rights in respect thereof shall, by virtue of the merger and without any action on the part of the stockholder, forthwith cease to exist and be converted into and represent the right to receive an amount, in cash and shares of Mobile Mini’s preferred stock equal to the Merger Consideration divided by the number of shares of Mobile Storage Group’s common stock issued and outstanding immediately prior to the effective time of the merger and held by the stockholders of Mobile Storage Group.

 

Conversion of Cactus Merger Sub Stock.  At the effective time of the merger, by virtue of the merger and without any action on the part of any party, each share of Cactus Merger Sub, Inc.’s common stock issued and outstanding immediately prior to the effective time of the merger, will be converted into and exchanged for one validly issued, fully paid, and nonassessable share of the surviving corporation’s common stock. Each stock certificate of Cactus Merger Sub, Inc. evidencing ownership of any such shares will from and after the effective time of the merger, evidence ownership of shares of the Mobile Storage Group’s common stock, so that, after the effective time of the merger, Mobile Mini shall be the holder of all of the issued and outstanding shares of the Mobile Storage Group’s common stock.

 

Effect on Options.  Immediately prior to the effective time of the merger, all options issued under the option plans of Mobile Storage Group (other than the options held by William Armstead, Jeffrey Kluckman, Jody Miller and Allan Villegas pursuant to certain nonqualified stock option agreements with Mobile Storage Group, dated August 1, 2006) that are outstanding on such date will be cancelled and will cease to exist, and the holder of such options will cease to have any rights with respect thereto, except with respect to Messrs. Armstead, Kluckman, Villegas and Miller who will have the right to receive a pro rata portion of the Merger Consideration. The pro rata portion of the stockholders of Mobile Storage Group shall be calculated as if the options held by William Armstead, Jeffrey Kluckman, Jody Miller and Allan Villegas were exercised for cash immediately prior to the effective time of the merger and William Armstead, Jeffrey Kluckman, Jody Miller and Allan Villegas shall receive a pro rata portion of the Merger Consideration.

No Further Ownership Rights in Mobile Storage Group Common Stock.  At and after the effective time of the merger, each stockholder of Mobile Storage Group shall cease to have any rights as a stockholder of Mobile Storage Group, except as otherwise required by applicable law and except for the right of each stockholder of Mobile Storage Group to surrender his or her stock certificate or lost stock certificate affidavit in exchange for payment of the applicable Merger Consideration, and no transfer of Mobile Storage Group common stock shall be made on the stock transfer books of the surviving corporation. At the close of business on the day of the effective time of the merger the stock ledger of Mobile Storage Group shall be closed.

 

Merger Consideration

 

Merger Consideration.  Upon completion of the merger, the stockholders of Mobile Storage Group shall receive $701,500,000 less the Net Debt of Mobile Storage Group, plus or minus the Net Debt Adjustment, plus or minus the Working Capital Adjustment, plus or minus the Capital Expenditure Adjustment minus the unpaid Transaction Expenses of Mobile Storage Group plus the Acquisition Amount, which we refer to as the Merger Consideration.

 

Closing Statement and Estimated Merger Consideration.  At least 3 business days, but not more than 5 business days, prior to the closing date, Mobile Storage Group shall deliver to Mobile Mini a statement, as of the closing date, setting forth Mobile Storage Group’s good faith calculation of the estimated Merger Consideration based on Mobile Storage Group’s estimates of its Net Debt, the Net Debt Adjustment, the Working Capital Adjustment, the Capital Expenditures Adjustment, its unpaid Transaction Expenses and the Acquisition Amount.

 

“Acquisition Amount” means the value of any corporate acquisition by Mobile Storage Group or any of its subsidiaries approved by Mobile Mini in writing.

 

“Net Debt” means the consolidated indebtedness of Mobile Storage Group and its subsidiaries minus the consolidated cash and cash equivalents of Mobile Storage Group and its subsidiaries as of the closing.

 

“Net Debt Adjustment” means the amount, if any, by which the Net Debt is greater or less than $535,000,000.

 

“Working Capital Adjustment” means the amount, if any, by which the working capital is greater than $1,500,000 or is less than -$1,500,000 as of the closing (if the working capital is between $1,500,000 and -$1,500,000, the Working Capital Adjustment shall be $0.00).

 

“Capital Expenditure Adjustment” means the amount, if any, by which Mobile Storage Group’s consolidated capital expenditures for the period commencing on January 1, 2008 and ending on the closing date is greater or less than the capital expenditures amount for the same period shown on, or derived from, the adjusted capital expenditures budget of Mobile Storage Group for the calendar year ended December 31, 2008 made available to Mobile Mini (as adjusted in the event the closing date is a date other than the last day of a calendar month).

 

“Transaction Expenses” means the amount payable by Mobile Storage Group for all out-of-pocket costs and expenses incurred by Mobile Storage Group or on behalf of its stockholders in connection with the merger, such as brokers’ fees, advisors’ fees and expenses, required consent payments, “stay-around” and similar bonuses or payments to current or former directors, officers, employees and consultants paid as a result or in connection with the merger as of the closing other than the payments under the agreed to retention bonus plan.

 

To the extent the estimated Merger Consideration payable at closing exceeds $154,000,000, the stockholders of Mobile Storage Group will receive the aggregate of 8,555,556 shares of preferred stock of Mobile Mini valued at $18.00 per share plus an amount of cash equal to the amount by which the estimated Merger Consideration exceeds $154,000,000. If the estimated Merger Consideration is equal to or less than $154,000,000, the stockholders of Mobile Storage Group will only receive an amount of shares of preferred stock of Mobile Mini equal to the estimated Merger Consideration divided by $18.00.

 

At the closing, the Mobile Storage Group stockholders will place into escrow $15,000,000 of the estimated Merger Consideration (in cash and/or shares of Mobile Mini preferred stock valued at $18.00 per share) to satisfy any post-closing adjustments of the Merger Consideration and to secure their indemnification obligations under the Merger Agreement. At all times while shares of Mobile Mini preferred stock are held in escrow, the stockholders of Mobile Storage Group shall have the right to (i) exercise any voting rights with respect to the escrowed shares of

preferred stock, and (ii) receive all products and proceeds of any of the escrowed shares of preferred stock, including all dividends, whether in the form of cash, stock or any other form, and any other rights and other property which the stockholders of Mobile Storage Group are, from time to time, entitled to receive in respect of, or in exchange, for any or all of the escrowed shares.

 

Merger Consideration Adjustments.  The estimated Merger Consideration will be subject to post-closing adjustments. To the extent the Merger Consideration as finally determined is greater or less than the estimated Merger Consideration paid at closing, Mobile Mini or the stockholders of Mobile Storage Group, as the case may be, shall pay the appropriate merger consideration adjustment pursuant to the terms of the Merger Agreement. Pursuant to the Merger Agreement, the stockholders of Mobile Storage Group may elect to pay in cash any merger consideration adjustment in lieu of releasing or returning any preferred stock held in escrow or otherwise.

 

In no event shall Mobile Mini be obligated to issue to the stockholders of Mobile Storage Group more than 8,555,556 shares of preferred stock.

 

Surviving Corporation, Governing Documents and Officers and Directors

 

At the effective time of the merger, the certificate of incorporation and by-laws of Mobile Storage Group, as in effect immediately prior to such effective time, will be the certificate of incorporation and by-laws respectively of the surviving corporation of the merger. Subject to Mobile Mini’s right to request the resignation of Mobile Storage Group’s officers and directors at the effective time of the merger, the officers and directors of Mobile Storage Group prior to the effective time of the merger will continue to be the officers and directors of the surviving corporation of the merger, subject to the applicable provisions of the certificate of incorporation and by-laws of the surviving corporation.

 

Closing

 

Unless the parties agree otherwise, the completion of the merger will occur on a date to be specified by Mobile Mini and Mobile Storage Group that will be no later than 3 business days immediately following the day on which the last of the closing conditions (other than any conditions that by their nature are to be satisfied at the closing) is satisfied or waived. See “— Conditions to the Merger” beginning on page 50. The parties currently expect to complete the merger in the second quarter of 2008.

 

Effective Time of the Merger

 

The merger will become effective upon the acceptance of the filing of a certificate of merger in accordance with Section 251 of the Delaware Law with the Secretary of State of the State of Delaware, or at such other subsequent date or time as Mobile Mini, Cactus Merger Sub, Inc. and Mobile Storage Group may agree and specify in the certificate of merger. Mobile Mini, Cactus Merger Sub, Inc. and Mobile Storage Group will file the certificate of merger on the closing date of the merger.

 

Representations and Warranties

 

The Merger Agreement contains representations and warranties made by Mobile Storage Group to Mobile Mini and Cactus Merger Sub, Inc. relating to a number of matters, including the following:

 

 

 

The Merger Agreement also contains representations and warranties made by Mobile Mini and Cactus Merger Sub, Inc. to Mobile Storage Group relating to a number of matters, including the following:

 

 

 

The representations and warranties contained in the Merger Agreement were made for purposes of the Merger Agreement and are subject to qualifications and limitations agreed to by the respective parties in connection with negotiating the terms of the Merger Agreement. In addition, certain representations and warranties were made as of a specific date, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts. This description of the representations and warranties, and their reproduction in the copy of the Merger Agreement attached to this proxy statement as Annex A, are included solely to provide investors with information regarding the terms of the Merger Agreement. Accordingly, the representations and warranties and other provisions of the Merger Agreement should not be read alone, but instead should only be read together with the information provided elsewhere in this proxy statement and in the documents incorporated by reference into this proxy statement, including the periodic and current reports and statements that Mobile Mini file with the SEC. See “— Where You Can Find More Information” beginning on page 111.

 

Certain of these representations and warranties are qualified by “materiality” or “material adverse effect”. For purposes of the Merger Agreement, a “material adverse effect” with respect to Mobile Storage Group or Mobile Mini, as the case may be, means any event, circumstance, fact, change or effect that, individually or in the aggregate, is or would reasonably be expected to be materially adverse (i) to the business, assets, liabilities, results of operation or financial condition of that party and its subsidiaries, taken as a whole or (ii) on the ability of that party to materially perform its obligations under the Merger Agreement, other than a material adverse effect that arises or results from any of the following:

 

 

 

except, in the case of the first three points above, to the extent such change has a disproportionately negative effect on such party and its subsidiaries (taken as whole), compared with other companies operating in the same industry.

 

The representations and warranties in the Merger Agreement survive until 12 months after the closing date of the merger. If the Merger Agreement is validly terminated, there will be no liability under the representations and warranties of the parties, or otherwise under the Merger Agreement, except as described below under “— Effect of Termination” and “— Termination Fees and Expenses” beginning on page 54.

 

Covenants and Agreements

 

Conduct of Business of Mobile Storage Group Pending the Merger.  Mobile Storage Group has agreed that, except as set forth in the Merger Agreement, during the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Storage Group will cause each of its subsidiaries to carry on its business in the ordinary and usual course and to use all commercially reasonable efforts to preserve intact its present business organizations, keep available the services of its officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, customers and others with which it has a business relationship.

 

Additionally, Mobile Storage Group has agreed that, except as may be approved in writing by Mobile Mini or as expressly permitted or required by the Merger Agreement, prior to the completion of the merger, Mobile Storage Group will not, and will cause each of its subsidiaries to, refrain from the following (provided, however, that this provision shall not be construed to give to Mobile Mini, directly or indirectly, the right to control or direct Mobile Storage Group’s businesses or operations prior to the completion of the merger):

 

 

 

 

 

Additionally, Mobile Storage Group and its subsidiaries have agreed that, during the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement, they shall use all commercially reasonable efforts to (i) confer on a monthly basis with one or more designated representatives of Mobile Mini regarding operational matters (including employee and human resources related matters) and the general status of ongoing operations to the extent permitted by law and (ii) keep all insurance policies currently maintained with respect to Mobile Storage Group and its subsidiaries and their respective assets and properties, or suitable replacements or renewals, in full force and effect through the close of business until the completion of the merger. Neither Mobile Storage Group nor its subsidiaries MSG WC Intermediary Co. and Mobile Services Group, Inc. will conduct any business, incur any new indebtedness or hold any new assets other than the equity interests of their respective subsidiaries. Further, Mobile Storage Group has agreed to provide Mobile Mini with a monthly consolidated balance sheet of Mobile Storage Group and its subsidiaries for the preceding month and the related profit and loss statement when they are available, and has agreed to cause its Chief Executive Officer and Chief Financial Officer to be available to discuss such financial statements and the operating performance of Mobile Storage Group. Mobile Storage Group has also agreed to provide Mobile Mini with its final audited 2007 financial statements after it is received from Mobile Storage Group’s auditors, and to notify Mobile Mini upon obtaining any knowledge of any proposed audit adjustments to the draft financial statements of Mobile Services Group, Inc. and its subsidiaries as at December 31, 2007.

 

Conduct of Business of Mobile Mini Pending the Merger.  During the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement. Mobile Mini has agreed not to:

 

 

Further, Mobile Mini has agreed that, during the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Mini will, and will cause each of its subsidiaries to, use all commercially reasonable efforts to confer on a monthly basis with one or more designated representatives of Mobile Storage Group regarding operational matters (including employee and human resources related matters) and the general status of ongoing operations.

 

Exclusivity.  From February 22, 2008 and until the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Storage Group and its subsidiaries have agreed not to engage in any discussions or negotiations with, or provide any information to, any person or entity (other than Mobile Mini and its affiliates and representatives), concerning any purchase of any capital stock of Mobile Storage Group or any of its subsidiaries or any merger, consolidation or other business combination, asset sale, recapitalization or similar transaction involving Mobile Storage Group or any of its subsidiaries. Mobile Storage Group has agreed to notify Mobile Mini as soon as practicable after Mobile Storage Group has knowledge of any person making any proposal, offer, inquiry, or contact with Mobile Storage Group, with respect to any such proposal for purchase of capital stock, merger, consolidation, asset sale, recapitalization or similar transaction involving Mobile Storage Group or its subsidiaries and to describe the identity of the person making such proposal and the substance and material terms of such contact and such proposal.

 

Mobile Mini has agreed not to knowingly solicit during the period commencing on February 22, 2008 and ending on the earlier of the date that is 4 months from February 22, 2008 or on the date of the completion of the merger, any proposals to acquire Mobile Mini.

Access to Information.  The Merger Agreement provides mutual rights to each of Mobile Storage Group and Mobile Mini to access the properties, books and records of the other party, and obligates each party to provide information regarding its business and properties to the other party to the extent permitted by law. Each of Mobile Mini and Mobile Storage Group and their respective subsidiaries agree to permit the other party and its representatives to have reasonable access during normal business hours and on reasonable written advance notice, to its premises and to its properties, books and records and shall cause its officers, employees counsel, accountants, consultants and other representatives to furnish the other party with such financial and operating data and other information with respect to its business and properties as such other party shall request from time to time. Such investigation and assistance shall not unreasonably disrupt the operations of the party providing access to such investigation, cause the loss of attorney/client privilege, and any information provided pursuant to such investigation by either Mobile Mini or Mobile Storage Group or their respective subsidiaries shall be subject to the terms of the mutual confidentiality agreement, between Mobile Storage Group and Mobile Mini.

 

Notification of Certain Matters.  Mobile Storage Group agrees to provide prompt written notice to Mobile Mini of (i) any notice of, or other communication relating to, a default or event of default under any material contact, (ii) any representation or warranty made by Mobile Storage Group in the Merger Agreement or in any instrument delivered pursuant to it becoming untrue or inaccurate in any material respect, (iii) the failure of any condition precedent to either party’s obligations, and (iv) any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by the Merger Agreement. The Merger Agreement provides that such notice shall amend Mobile Storage Group’s disclosure letter for informational purposes only and will not affect Mobile Mini’s remedies under the Merger Agreement, or cure any breach of any covenant, representation or warranty in the Merger Agreement or related agreements for any purpose, including satisfaction of closing conditions and Mobile Mini’s rights to indemnification.

 

Debt Financing.  Mobile Mini agrees to use all commercially reasonable efforts to (i) maintain in full force and effect the Commitment Letter and refrain from amending, terminating, or waiving any provisions under the Commitment Letter, (ii) to the extent within its control, comply with all of its covenants in, and as promptly as practicable take all actions necessary or desirable to cause all of the conditions to the funding of the financing contemplated in, the Commitment Letter, and ensure that there is no breach or default or event of default under any of its existing financing agreements, and (iii) accept any changes in the terms and conditions of the proposed financing contemplated in the “market flex” provision of the Commitment Letter or fee letter related thereto. Mobile Mini agrees to notify Mobile Storage Group following receipt of any notification from any financing source under the Commitment Letter or other financing of such source’s indications that it does not intend to provide, questions its requirement to provide or asserts its inability or refusal to provide the financing described in the Commitment Letter.

 

If the funding under the Commitment Letter becomes unavailable or Mobile Mini reasonably believes that such funding may not occur (other than due to breach by Mobile Storage Group of the Merger Agreement or related agreements), Mobile Mini agrees to use all commercially reasonable efforts to obtain alternative financing on terms that are no less favorable than to those contained in the Commitment Letter. Mobile Mini shall keep Mobile Storage Group reasonably informed of any material adverse developments relating to the proposed debt financing.

 

Affiliate Agreements.  Mobile Storage Group agrees to, and to cause its subsidiaries to, terminate at or prior to the completion of the merger, without payment or penalty, certain contracts between Mobile Storage Group or its subsidiaries and any of their affiliates (other than Mobile Storage Group or its subsidiaries) set forth on Mobile Storage Group’s disclosure letter to the Merger Agreement.

 

Mobile Storage Group’s Option Plans.  Mobile Storage Group agrees, as of the time of the completion of the merger, to take all actions necessary to (i) terminate all stock option plans (other than the options held by Messrs. Armstead, Kluckman, Villegas and Miller, all of whom will receive their respective pro rata portion of the Merger Consideration), stock incentive plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of Mobile Storage Group or its subsidiaries, (ii) cancel, terminate, and forfeit, all outstanding stock options, shares of restricted stock, or other awards in respect of the capital stock of Mobile Storage Group or its subsidiaries granted pursuant to such stock option plans or stock

incentive plans, and (iii) amend provisions of any employee benefit plan providing for the issuance, transfer or grant of any capital stock of, or any interest in respect of capital stock of, Mobile Storage Group or its subsidiaries.

 

WARN.  Mobile Storage Group shall be liable for any obligations with respect to employees arising under the Worker Adjustment and Retraining Notification Act, or WARN, and similar applicable state laws to the extent arising from the actions taken by Mobile Storage Group or its subsidiaries (not at the direction of Mobile Mini) on or prior to the completion of the merger. Mobile Storage Group agrees to cooperate with Mobile Mini in connection with providing notices under the WARN or similar applicable state laws and to notify Mobile Mini prior to announcing, implementing or effecting certain “employment losses” on or prior to the completion of the merger. On the date of the completion of the merger, Mobile Storage Group shall provide Mobile Mini with a list, by date and location, of such “employment losses” that occurred within the preceding 90 days or are scheduled to occur on or after the completion of the merger.

 

UK Employees.  From February 22, 2008 until the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Storage Group and its subsidiaries agree to consider written requests from Mobile Mini with respect to compliance with obligations imposed by certain applicable UK laws with respect to employees of Mobile Storage Group’s subsidiaries in the United Kingdom. If Mobile Storage Group and its subsidiaries decide to implement any such written requests of Mobile Mini, Mobile Mini shall indemnify stockholders and affiliates of Mobile Storage Group against losses incurred or suffered by them arising from the implementation of any such written request.

 

Indemnification of Directors and Officers.  Mobile Mini agrees that its organizational documents shall contain provisions no less favorable with respect to the limitation or elimination of liability and indemnification than are set forth in the organizational documents of Mobile Storage Group as of the date of the Merger Agreement. Such provisions shall not be amended, repealed or otherwise modified for a period of 6 years after the completion of the merger in any manner materially adverse to individuals who are directors or officers of Mobile Storage Group or its subsidiaries prior to the completion of the merger. Mobile Mini also agrees to purchase tail insurance covering each person currently covered by the Mobile Storage Group’s or its subsidiaries’ directors’ and officers’ liability insurance policies, with respect to matters or circumstances occurring at or prior to the completion of the merger, on coverage terms that are equivalent in all material respects to the coverage terms of such current insurance policies in effect for Mobile Storage Group and its subsidiaries on the date of the Merger Agreement.

 

Parent Organizational Documents.  Immediately prior to the effective time and assuming the receipt of Mobile Mini’s stockholders approval, Mobile Mini shall file with the Secretary State of the State of Delaware the amendment to its certificate of incorporation and the certificate of designation to be effective immediately prior to the effective time.

 

Waiver of Standstill.  Regardless the standstill provisions of the mutual confidentiality agreement between Mobile Storage Group and Mobile Mini, after this proxy statement has been mailed to Mobile Mini’s stockholders, WCAS, the majority stockholder of Mobile Storage Group, shall be permitted to purchase up to 2,000,000 shares of common stock of Mobile Mini in the aggregate, subject to applicable laws. Such purchases shall not be permitted to be made in the event WCAS is in possession of material non-public information. Such purchases may be effectuated through market trades or private purchases prior or after the closing of the Merger. Because the proxy statement will be mailed to Mobile Mini’s stockholders after the record date for the special meeting of stockholders of Mobile Mini, WCAS will not have any voting rights with respect to the approval of the Merger. Two business days prior to the completion of the merger, Mobile Storage Group shall deliver a certificate to Mobile Mini containing a list of each such purchase that includes the name of the acquiring person, the number of shares acquired, the means by which such shares were acquired, the date of each such purchase, and the purchase prices paid by such persons. After the completion of the merger, WCAS shall notify Mobile Mini in writing within 2 business days after such purchase of securities, which notice shall contain the same information described in the immediately preceding sentence.

 

Financial Reports.  Promptly following their availability in the ordinary course of business, Mobile Mini shall provide Mobile Storage Group with a monthly consolidated balance sheet of Mobile Mini and its subsidiaries for the preceding month and the related profit and loss statement, and shall cause Mobile Mini’s Chief Executive

Officer and the Chief Financial Officer to be available to discuss such financial statements and the financial and operating performance of Mobile Mini as reasonably requested by Mobile Storage Group.

 

Compensation and Benefits.  For at least 9 months following the completion of the merger, Mobile Mini will cause the surviving corporation to provide compensation and benefits to the employees of Mobile Storage Group as of the completion of the merger that are substantially equivalent in the aggregate to either the compensation and benefits received by such continuing employees of Mobile Storage Group prior to the completion of the merger, or the compensation and benefits provided to similarly situated employees of Mobile Mini and its subsidiaries.

 

Unless Mobile Mini requests otherwise in writing, the Board of Directors of Mobile Storage Group is required to adopt resolutions generally terminating, effective no later than the day prior to the completion of the merger, any “401(k) plan” sponsored or contributed to by Mobile Storage Group. Mobile Mini will cause any Mobile Mini compensation or benefit plan in which the continuing employees of Mobile Storage Group participate following the completion the merger, to treat, for purposes of vesting and eligibility, service rendered to the Mobile Services Group as service to Mobile Mini and is affiliates, subject to certain exceptions. Each of Mobile Mini and the surviving corporation will cause its medical, dental and other welfare plans in which the continuing employees of Mobile Storage Group or their dependants commence to participate after the completion of the merger to waive certain preexisting condition limitations and take into account certain deductible and out-of-pocket expenses incurred by the continuing employees of Mobile Storage Group and their dependants under similar plans of Mobile Storage Group or any of its subsidiaries. Mobile Mini and its affiliates agree to be solely responsible for satisfying the COBRA health care continuation coverage requirements for certain qualifying individuals who were covered by the health plans of Mobile Storage Group prior to the completion of the merger.

 

Prior to the completion of the merger, Mobile Storage Group will use commercially reasonable efforts to cause those persons who are subject to the rules regarding the Federal excise tax on excess “parachute” payments to waive any payment contingent upon the merger to the extent such payment would be subject to such excise tax. Following the receipt of such waivers, Mobile Storage Group will submit such payments for approval by its stockholders, and provide stockholders with disclosure of such payments.

 

Certain Other Covenants.  The Merger Agreement also contains additional covenants, including covenants relating to the filing of this proxy statement, Mobile Storage Group’s cooperation with Mobile Mini in connection with the debt financing, cooperation and consultation regarding filings and proceedings with governmental and other agencies and organizations and obtaining required consents, cooperation and consultation regarding public statements with respect to transactions contemplated by the Merger Agreement and cooperation with respect to contesting or defending any legal proceedings brought by a third party in connection with the transactions contemplated by the Merger Agreement.

 

Conditions to the Merger

 

Conditions to Each Party’s Obligations.  The respective obligations of each of Mobile Mini and Mobile Storage Group, to effect the merger are conditioned upon the satisfaction or waiver by Mobile Mini and Mobile Storage Group of the following conditions:

 

 

Conditions to Obligations of Mobile Mini.  The obligations of Mobile Mini to effect the merger are conditioned upon the satisfaction or waiver by Mobile Mini of the following conditions:

 

 

 

Conditions to Obligations of Mobile Storage Group.  The obligations of Mobile Storage Group to effect the merger are conditioned upon the satisfaction or waiver by Mobile Storage Group of the following conditions:

 

 

 

Each of the conditions to Mobile Mini’s and Mobile Storage Group’s obligations to complete the merger may be waived, in whole or in part, to the extent permitted by applicable law, by agreement of Mobile Mini and Mobile Storage Group if the condition is a condition to both Mobile Mini’s and Mobile Storage Group’s obligation to complete the merger, or by the party for which such condition is a condition of its obligation to complete the merger. The Boards of Directors of Mobile Mini and Mobile Storage Group may evaluate the materiality of any such waiver to determine whether amendment of this proxy statement and re-solicitation of proxies is necessary. However, Mobile Mini and Mobile Storage Group generally do not expect any such waiver to be significant enough to require an amendment of this proxy statement and re-solicitation of stockholders. In the event that any such waiver is not determined to be significant enough to require re-solicitation of stockholders, Mobile Mini will have the discretion to complete the merger without seeking further Mobile Mini stockholder approval.

 

Indemnification

 

Mobile Storage Group’s stockholders have agreed to hold Mobile Mini and its affiliates, successors and assigns harmless on an after tax basis (taking into account benefits arising from the loss) for any losses which arise from or in connection with any breach by Mobile Storage Group or any of Mobile Storage Group’s stockholders of any of their representations, warranties or covenants under the Merger Agreement or in any ancillary agreement or in any instrument, certificate or writing delivered pursuant to the Merger Agreement. Mobile Mini has agreed to hold harmless Mobile Storage Group’s stockholders and their affiliates on an after-tax basis (taking into account benefits arising from any loss) for any breach by Mobile Mini of any of its representations, warranties or covenants under the Merger Agreement or in any instrument, certificate or writing delivered pursuant to the Merger Agreement.

 

The obligations to indemnify and hold harmless for breaches of representations and warranties pursuant to the Merger Agreement shall survive until the date that is 12 months after the consummation of the merger, except for claims for indemnification asserted prior to the end of such period, which claims shall survive until final resolution thereof. The maximum amount of Mobile Mini’s and Mobile Storage Group’s indemnification liabilities under the Merger Agreement is $30 million each. Indemnification claims may be asserted only if each individual indemnifiable loss exceeds $50,000 and until the total amount of losses exceeds $3 million; provided, that to the extent the amount of indemnifiable losses exceeds the $3 million, the indemnified party shall be entitled to recover the entire amount of losses in excess of $1.5 million. For purposes of determining whether an individual loss exceeds $50,000, all losses based on claims or a series of related claims arising out of similar facts or circumstances shall be aggregated.

 

All claims for indemnification by Mobile Mini shall first be satisfied from the escrow amount and once the escrow amount has been paid to satisfy Mobile Mini’s indemnification claims or released to Mobile Storage Group’s stockholders pursuant to the escrow agreement, Mobile Mini shall be entitled to pursue all claims for indemnification directly against Mobile Storage Group’s stockholders in accordance with the joinder agreement or letters of transmittal, as the case may be. Except as otherwise provided in the joinder agreement, the indemnification obligations of Mobile Storage Group’s stockholders are several and not joint.

 

All claims for indemnification by Mobile Storage Group’s stockholders as finally determined pursuant to the Merger Agreement, shall be paid by Mobile Mini to such Mobile Storage Group’s stockholders by wire transfer in immediately available funds to the bank accounts designated by such Mobile Storage Group’s stockholders in a notice to Mobile Mini not less than two business days prior to such payment.

 

Release of Amounts in Escrow.  Subject to the terms of the Merger Agreement, (i) if the cash in escrow exceeds the amount of an indemnification claim by Mobile Mini, then the escrow agent shall release an amount in

cash equal to such claim to Mobile Mini; (ii) if the claim exceeds the cash in escrow but is less than the aggregate Fair Market Value of the preferred stock plus the cash then held in escrow, then the escrow agent shall release the entire balance of the cash then held in escrow plus a number of shares of preferred stock equal to the amount by which Mobile Mini’s indemnification claim exceeds the cash balance in escrow divided by the Fair Market Value; or (iii) if Mobile Mini’s claim exceeds the aggregate Fair Market Value of preferred stock plus the cash then held in escrow, then the stockholders of Mobile Storage Group shall, at their option (x) return to Mobile Mini a number of shares of preferred stock of Mobile Mini equal to such excess divided by the Fair Market Value per share of the preferred stock, or (y) pay to Mobile Mini in accordance with the joinder agreement or the applicable letter of transmittal, as the case may be, such excess in cash.

 

“Fair Market Value” means, for purposes of valuing Mobile Mini’s preferred stock under the indemnification provisions of the Merger Agreement, the as-converted value of Mobile Mini’s preferred stock based on the average of the closing prices of Mobile Mini’s common stock on the NASDAQ reporting system or on the principal exchange on which Mobile Mini’s common stock is traded (as reported in the Wall Street Journal) over a period of 30 days consisting of the day the final amount of indemnifiable losses has been agreed to or otherwise determined pursuant to the provisions of the Merger Agreement and the 29 consecutive trading days prior to such day the final amount of indemnifiable losses has been agreed or otherwise determined pursuant to the provisions of the Merger Agreement; provided, that if Mobile Mini’s common stock is not traded on any exchange or the over-the-counter market, then “Market Price” shall be determined in good faith by Mobile Mini and WCAS.

 

Insurance Policies.  The amount of losses payable pursuant to the indemnification provision of the Merger Agreement shall be reduced by any amounts actually received under applicable insurance policies or from any other person alleged to be responsible for such losses.

 

Termination

 

The Merger Agreement may be terminated at any time before the completion of the merger, in any of the following circumstances:

 

 

 

Termination Fees and Expenses

 

If the Merger Agreement is terminated: