Williams Scotsman, Inc. History

Address:

8211 Town Center Dr.
Baltimore, Maryland 21236
U.S.A.

Telephone: (410) 931-6000
Toll Free: 800-782-1500
Fax: (410) 931-6047

Private Company
Incorporated: 1990
Employees: 1,150
Sales: $437.8 million (2003)
NAIC: 532420 Office Machinery and Equipment Rental and Leasing

Company Perspectives:

Williams Scotsman's mission is to exceed our customers' expectations as the quality leader in providing immediate solutions to their relocatable work space needs. Our goal, to ensure this high level of customer service and the company's success, includes a commitment to investing in our people to foster growth, financial well being, and an entrepreneurial spirit for the company and its employees.

Key Dates:

1990:: Williams Scotsman is formed through the merger of two regional companies.
1993:: New owner prompts national growth through acquisitions.
1997:: Recapitalization leaves company with negative equity.
1998:: First international office opens in Toronto, Canada.
2002:: Williams Scotsman introduces new products for the education market.
2004:: Williams Scotsman opens new offices in Mexico and purchases minority stake in Spanish firm Wiron Prefabricados Modulares, S.A.

Company History:

Williams Scotsman, Inc. is one of the leading providers of mobile and modular office space, serving more than 24,000 customers through over 90 offices in the United States, Canada, and Mexico. The company leases a fleet of more than 94,000 units of mobile offices, portable classrooms, and storage products. Offices and classrooms are available in single-wide, double-wide, and custom sizes. The unique Redi-Space Solutions product line offers flexibility in both size and floor plan. Amenities to mobile structures include heating, air conditioning, plumbing, and high technology infrastructure. Williams Scotsman constructs, delivers, and installs modular buildings in single-story or multistory configurations, an alternative to site-built structures when rapid construction is required. The company's storage products, including vans, trailers, and containers, are intended for onsite use, such as for retail overflow inventory during the Christmas shopping season. Specialty products include pole trailers and reel trailers, for hauling equipment, and enclosed fiber optic trailers, for situations where high technology equipment is used.

With more than 50 years in business, Williams Scotsman is known for providing quality products and excellent customer service. The company finds its customers in more than 400 industries, including hospitals, schools and universities, construction companies, government agencies, and small and large corporations.

Merger of Regional Companies, Intentions for National Expansion: 1990

Williams Scotsman formed in 1990, through the merger of Williams Mobile Offices/Modular Structures and Scotsman Manufacturing Co. From Baltimore, Maryland, and Gardena, California, respectively, the two companies combined their geographically disparate operations for the purpose of developing a national company. The two companies brought more than 40 years to their combined business.

Williams Mobile Offices, founded in 1944, originally sold construction trailers small enough to be towed by a car. Later, the company began to sell and lease mobile double-wide office structures. During the 1960s, the company expanded outside the Baltimore area for the first time with branch locations in Atlanta and Chicago. Leasing its signature, two-tone green mobile structures, Williams developed business operations along the East Coast and into the Midwest. During the 1980s Williams began to manufacture and install modular office structures. Though not less expensive than site-built offices, modular construction offered a rapid construction process, significantly reducing required construction time. Contrary to the stereotype, modular structures could be designed with aesthetic considerations in mind, such as the architecture in the surrounding community, with masonry, stucco, wood, and brick exteriors possible. Williams offered modular office structures in one-story design or multiple stories with complex architectural dimensions and such interior options as fine cherry wood paneling. Williams built a new company headquarters in Baltimore from modular structures in 1986.

Scotsman Manufacturing, founded in 1945, manufactured recreational vehicles for rental companies. The company began to lease mobile office structures in 1965, as manufacturers started offering larger structures with amenities, such as toilets and showers. Scotsman leased these structures to movie studios for dressing rooms. Eventually, the company entered the market for modular office structures.

At the time of the merger between Williams and Scotsman Manufacturing, Williams was the second largest supplier of mobile offices in the United States, with 15,000 rental units leased through 17 offices in 13 Eastern states. Scotsman operated 11 offices in four Western states with a fleet of 7,500 rental units. The merger was recorded as an acquisition of Williams Mobile Offices from the Williams Family Trust by the Trijka Family Trust, which owned Scotsman Manufacturing. The new company, Williams Scotsman, continued to be family operated.

Williams Scotsman intended to develop a national network of mobile structure lessors. The new company inherited manufacturing facilities from its two predecessors, but decided to close them in order to concentrate on its leasing operations. The company grew slowly, with a focus on internal growth through fleet expansion; only three branch offices opened over the next few years. By 1993 Williams Scotsman owned a fleet of 25,000 mobile office and storage units leased through 31 offices in 18 states.

New Owners Providing Impetus for Rapid 1990s Expansion

Odyssey Partners, a private investment group, acquired Williams Scotsman for $234 million in 1993. The new owners, having the financial capability to develop Williams Scotsman rapidly on a national level, acquired 19 mobile office leasing companies between 1994 and 1997, adding 23,000 units to the fleet. In 1996 Williams Scotsman entered the market for storage products for onsite use, including vans, trailers, and ground level containers. Some customers used the containers for temporary storage during a building or renovation project; Wal-Mart and Kmart used the storage units to hold extra merchandise inventory during the Christmas season. By the end of 1997 Williams Scotsman generated $235 million in revenues through 73 branch offices in 38 states, leasing a fleet of 48,000 mobile offices; the company served more than 12,500 customers in 450 different industries.

Recapitalization of Williams Scotsman in 1997 weakened the company's financial position, however. That year the Cypress Group and Keystone, Inc., two private investment firms, acquired a 90 percent ownership in Williams Scotsman for $675 million. Senior managers acquired a minority stake, and Odyssey Partners also retained a minority stake. The Cypress Group and Keystone funded the acquisition with $400 million in senior notes and a $300 million revolving credit facility. This left Williams Scotsman with $112 million negative equity as of December 31, 1997, and encumbered the company with a high level of interest expense.

Opportunities for growth as a national company prompted Williams Scotsman to continue its acquisition strategy. In July 1998 the company announced an agreement to acquire SpaceMaster International, Inc, of Atlanta, for $273 million, including assumption of debt. SpaceMaster complemented Williams Scotsman's geographic base, with 26 branch offices in 13 states concentrated in the southeastern United States, operating a fleet of more than 12,800 lease units. The acquisition potentially added $325 million in revenues. Williams Scotsman funded the acquisition with bank debt and equity investment from the company's owners; the company refinanced the assumed debt.

A significant portion of SpaceMaster's fleet included portable classrooms, an important area of growth for Williams Scotsman, as the market for portable classrooms experienced significant growth during the 1990s. While schools had used portable classrooms since the early 1980s, their popularity as a low-cost alternative facilitated growth, whether used instead of permanent buildings or as temporary structures while permanent facilities were constructed. Schools felt pressured to build quickly as enrollment increased and then President Clinton's education initiative reduced classroom size. The move into portable classrooms was a natural fit for Williams Scotsman, and by 1999 the company owned a fleet of 12,000 rental units.

Internal growth and new acquisitions expanded Williams Scotsman's presence with facilities in new and existing markets. The company expanded outside the United States for the first time in late 1998, opening its first office in Canada, in Toronto, Ontario. In February 1999 the company acquired Evergreen Mobile Company of Seattle, the largest mobile office dealer in Washington, for $36.2 million. Evergreen owned a fleet of 2,000 portable classrooms and modular structures. The August 2000 acquisition of Truck and Trailer Sales (TNT) strengthened Williams Scotsman's regional operations in Missouri and southern Illinois. In addition to expanding its fleet of mobile offices and storage products, TNT added fiber optic trailers, pole trailers, and Wells Cargo reel trailers. Williams Scotsman combined its St. Louis office with the nearby TNT office. In February 2001 Williams Scotsman acquired McKinney Mobile Modular for $26 million, obtaining a fleet of 1,600 mobile units. Based in California, the sales and leasing company was notable for its strength in the modular classrooms market in the Pacific Northwest. Williams Scotsman expanded its storage product and mobile structures fleet through new factory purchases.

By the end of 2001 Williams Scotsman owned a fleet of 93,900 units, including mobile offices, portable classrooms, and storage products. The company operated 88 branch offices in the United States and Canada. The company generated revenue of $492.2 million and net income of $22.7 million. Approximately half of revenues originated with the company's leasing operations, at $238.2 million. Sales of new and used equipment accounted for $113.3 million, delivery and installation for $97.3 million, and parts, supplies, and other sources at $43.4 million. Educational institutions accounted for 21 percent of overall revenue. Williams Scotsman's equity position improved slightly.

2002-04: New Products and Services and International Development

Williams Scotsman began to offer value-added services to its customers. In response to customer inquiries, Williams Scotsman offered customers a cellular technology security system for temporary or permanent structures through an exclusive agreement with Tattletale Portable Alarm Systems. The security system was of particular interest for construction companies seeking to protect machinery from theft. For its modular building customers, Williams Scotsman offered real-time viewing of project construction through a web-camera service. Inet OnSite allowed customers to inspect the construction process without having to travel to the site, saving time and money, especially if out-of-town. The service doubled as security surveillance.

With its national base of operations in a strong position, Williams Scotsman expanded its operations in Canada. In August 2002 the company acquired the storage products and mobile office fleet from Northgate Industries, Ltd., which served industrial markets in Edmonton, Alberta. Williams Scotsman paid $7 million for its fleet of 500 units. In June 2003 the company acquired the leasing operations of AFA Locations, Inc., of Montreal, for $3.2 million, involving 300 units.

Williams Scotsman introduced new products to enhance the company's ability to serve the education market in 2002. These included Type IV Classrooms which provided mobility with minimum impact at the location of use. Type VI Classrooms offered a low-cost option in refurbished units recommended for short-term lease, such as when renovation of a permanent structure required a temporary alternative. With Dell Computer Corporation, Williams Scotsman introduced CyberSpaces, modular classrooms customized with computer equipment. Customers chose from desktop or laptop computers, hardwired or wireless; hardware systems options included network servers and peripherals. Optional classroom amenities included appropriate furniture, a printer/scanner, a mobile wireless cart, and a SmartBoard, an electronic whiteboard that substituted for a conventional chalkboard. The new classroom structures were introduced at Williams Scotsman's Orlando branch office, as the State of Florida had passed a constitutional amendment that limited class-size. Along with new state funding for pre-kindergarten classes for four-year olds, Williams Scotsman expected significant immediate demand for portable classrooms in Florida.

Already the largest provider of mobile classrooms in California, Williams Scotsman acquired the California "Division of State Architects" (DSA) classroom units from GE Modular Space in March 2004. The acquisition involved 3,800 single and double-wide units, with 95 percent already under lease by K-12 public schools throughout the state. Williams Scotsman paid $43 million for the fleet and expected to earn $10 million in annual revenue with an average lease rate of $235 per month, slightly lower than the company's average of $249 per month at the time of the acquisition.

In 2004 the company launched its innovative new product line, Redi-Space Solutions, described as "the fastest, most flexible and durable family of relocatable buildings available." The three components of the product included the Redi-Plex Building, a columnless module that could be used singly or placed in a group to create a larger structure. Vinyl-covered Redi-Wall Systems provided quick adjustment to whatever floor plan a customer required. The third component, Redi-Access Systems, added ramps and steps. Williams Scotsman designed the system for situations when a building is needed in a hurry, but promoted it to all of its customer markets. The company projected that the product would change its industry's approach to mobile and modular space design.

Williams Scotsman announced international expansion with new operations in Europe and Mexico in August 2004. The company formed Williams Scotsman Europe, S.L. to acquire a minor interest in privately held Wiron Prefabricados Modulares, S.A., in Parla, Spain, near Madrid. Wiron owned several thousand modular units that the company leased through offices in all major cities in Spain. Williams Scotsman gained a seat on the board of directors, to begin learning about the company and operations in Spain, and obtained the right of first refusal for the sale of any additional shares of Wiron stock. In Mexico Williams Scotsman opened its main office in Mexico City and located a branch office in Monterey. The company accessed national distribution opportunities through an agreement with SaniRest, a major waste disposal company with 27 offices in Mexico.

Principal Subsidiaries: Evergreen Mobile Company; Space Master International, Inc.; Truck and Trailer Sales, Inc.; Williams Scotsman Europe, S.L.; Williams Scotsman of Canada, Inc.; Willscot Equipment, LLC.

Principal Competitors: GE Capital Modular Space; McGrath RentCorp; Mobile Mini, Inc.; Modtech Holdings Inc.; Transport International Pool, Inc.

Williams Scotsman, Inc. History

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Key Dates:

Company History:

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