Pasadena, Calif.-based General Finance Corp. last week announced that it entered into a definitive agreement to acquire RWA Holdings Pty Limited (the holding company of Royal Wolf Trading Australia), a privately held Australian corporation that sells and leases portable storage containers, portable container buildings and freight containers.
The definitive agreement provides that GFN will acquire all the outstanding shares of Royal Wolf from the Royal Wolf shareholders through a newly formed Australian subsidiary of GFN. The major shareholders of Royal Wolf are Equity Partners, an Australian mid-market private equity investor, and entities controlled by existing and former management of Royal Wolf.
The aggregate consideration for the acquisition is U.S. $87.4 million, subject to certain adjustments relating to levels of working capital, net tangible assets and container rental equipment, outstanding obligations under a certain container lease program, and costs and expenses of any acquisitions completed by Royal Wolf prior to the closing.
The GFN board of directors has unanimously approved the acquisition. The closing of the transaction is subject to customary conditions, including approval of the Australian Foreign Investment Review Board and the lack of a material adverse change with respect to Royal Wolf's business.
The closing of each transaction is expected to occur by either the end of 2006 or the first quarter of 2007. "We believe Royal Wolf is a high quality provider of sales, leasing and service of storage containers as well as the leader in its markets,” said Ronald Valenta, CEO of GFN. “Although Royal Wolf is not domiciled in the United States, it became available and it meets virtually every other criterion we have for a segment platform acquisition: a free standing profitable operation with a strong management, experienced at managing growth and acquisitions, and capable of building a global leader in its core segment as part of the GFN organization. Royal Wolf leases and sells portable storage containers, portable container buildings and freight containers through 15 customer service centers located throughout Australia. Royal Wolf is the market leader in Australia for container-based storage and accommodation products that include portable storage containers, portable container buildings and freight containers.