Williams Scotsman, a White Marsh-based company that leases mobile office and classroom units nationwide, said yesterday that it had agreed to be acquired by two investment groups for $675 million in cash and assumed debt -- more than double what it was purchased for four years ago.
The buyers of the 31-year-old company, the nation's second largest lessor of mobile office units, are the Cypress Group, a New York-based private investment group, and Keystone Inc., an investment group headed by billionaire Texas financier Robert M. Bass.
Cypress and Keystone are buying out Odyssey Partners' 90 percent interest in Williams Scotsman.
Odyssey is a closely held, New York-based investment group that is liquidating its holdings as part of a dissolution. The acquisition is expected to be completed by early June.
Odyssey purchased Williams Scotsman in late 1993 for a reported $234 million.
Cypress and Keystone are each buying a 45 percent stake in Williams Scotsman.
Williams Scotsman's management group, led by Chairman Barry Gossett, will retain a 5 percent stake and some Odyssey principals will acquire the remaining 5 percent stake, said David P. Spalding, vice chairman of Cypress.
"We focus on looking for growth companies," said Spalding. Williams, he said, has experienced strong growth in a booming niche industry.
Spalding said the investment groups were also attracted to Williams because of its strong leadership. "They are led by one of the finest management teams we've ever seen."
Williams Scotsman, founded in 1946 as a road construction company, will retain its name and maintain its headquarters in White Marsh, where it employs about 100. The company employs about 625 nationwide.
The deal, said Gerry Holt-haus, president of Williams Scotsman, is evidence that while the mobile office leasing business "isn't very high profile, it is substantive."
For the year that ended Dec. 31, Williams Scotsman's gross profits climbed 26 percent to $85.6 million. Revenues for the year rose 23 percent to $195.1 million, the company reported.
Williams Scotsman's biggest competitor is GE Modular Space, the nation's No. 1 mobile office firm and a division of General Electric Co.'s GE Capital unit.
Spalding at Cypress said his firm and Keystone have pledged capital to allow Williams to continue its expansion. That strategy has included opening new offices and buying competitors, Holthaus said. The company has bought at least 13 competitors since 1993.
Spalding estimates the capital also would help finance 10 new branch offices annually. Williams currently operates 60 branch leasing offices in 33 states.
Williams Scotsman, Holt-haus said, has been on a growth track since the mid-1980s, when it began to diversify its modular office space leasing business.
The business at that time was chiefly derived from the construction trades, which lease trailer-type offices for job sites. Today only about 25 percent of the company's revenues come from construction clients.
Instead, the majority comes from the booming trade in leasing temporary classrooms to school districts and mobile offices to a diverse customer base -- from film studios and broadcasters to operators of rock concerts, political conventions and other events.
The company's inventory of 42,500 mobile units is up from 25,000 units in 1993.
"It's our feeling the market in this country isn't saturated yet for this type of service. There are a lot of opportunities out there," said Spalding of Cypress, which is led by four former top executives of Lehman Brothers Holdings Inc.'s merchant banking department.
The firm, which manages a private equity fund with about $1 billion in commitments, has an interest in Texas-based Cinemark USA, the nation's fourth largest movie theater operator, and AMTROL Inc., a growing Rhode Island-based maker of residential water system components.
Keystone is the investment arm of Bass and his associates. Keystone has investments in numerous industries and has controlling interest in a number of private and public companies.
Pub Date: 4/15/97