Willscot's Overlevered Fleet with Unrentable Units Set to Become a Problem for McGrath Shareholders
We have extensive photographic evidence showing that WSC's modular space fleet contains old, decrepit and otherwise unrentable units
A Modular unit at Willscot Cherry Hill, NJ - June 2024
We are short the shares of Willscot Mobile Mini (WSC).
We believe the “special sauce” of Willscot’s business model is underinvestment in fleet assets, which flatters short-term free cash flow.
Contrary to the bull thesis, CapEx is neither optional nor discretionary. We provide extensive photographic evidence from WSC lots around the country showing battered, aged and, we believe, otherwise unrentable modular units.
The report is in two parts: 1. The report containing the short thesis and supporting information; 2. Appendix B, a document containing 130 pages of photographs from Willscot lots around the US.
Willscot Short Thesis
Willscot Lot Surveys
Quality fleet assets are critical for an equipment rental business. Willscot’s aged and often neglected modular fleet appears to have been a problem for years. It is now set to become a problem for McGrath RentCorp (MGRC) shareholders as well, given the pending acquisition.
Debt Games Over
Debt per unit 25K
Estimated EBITDA per unit 7.6K (3 years useful life on average)