Wolf’s Finance World

Mobile Mini Inc., which makes portable storage containers and mobile offices, said Friday its fourth-quarter profit dipped 11%, hurt by higher costs and interest expenses.

For the quarter ended Dec. 31, net income fell to $12.4 million, or 36 cents per share, from $14 million, or 38 cents in the prior-year quarter.

Analysts polled by Thomson Financial expected earnings of 35 cents.

A 17% jump in costs and expenses contributed to the profit decline. Higher interest expenses also took a toll.

The company also announced Friday it agreed to buy Mobile Storage Group Inc. in a deal valued at $701.5 million, including cash, preferred stock and debt.

The company said the acquisition will give it access to most portable storage markets in the U.S. and the U.K.

Under the terms of the deal, Mobile Mini will acquire all outstanding shares of Mobile Storage Group for $12.5 million in cash and shares of newly issued Mobile Mini convertible preferred stock valued at $154 million once converted into Mobile Mini shares.

The preferred stock will be convertible into about 8.55 million Mobile Mini shares at a price of $18 per share.

The company will also assume about $535 million in Mobile Storage Group debt.

Lease revenue, which made up the bulk of overall revenue, rose 8%. The company, though, said the rise was below its expectations due to economic conditions in California, Arizona and Florida no fax payday advance. Those states have been some of the hardest-hit by the weak housing market.

For the year, profit rose 3 percent to $44.2 million, or $1.22 per share, from $42.8 million, or $1.21 in the prior year.

Revenue jumped 16% to $318.3 million from $273.4 million in 2006.

Mobile Mini (MINI) said the deal with Mobile Storage Group will add to its earnings slightly in 2008 and will add 25% or more to analyst earnings-per-share estimates in 2009.

Analysts polled by Thomson Financial expect 2009 earnings per share of $1.69.

The company said Mobile Storage Group CEO Doug Waugaman will join Mobile Mini as chief operating officer of integration.

Mobile Mini said Mobile Storage Group’s majority owners - the private equity firm Welsh, Carson, Anderson & Stowe - will convert all their ownership into Mobile Mini preferred stock. The company added that two of the private-equity firm’s representatives will be elected to its board of directors.

To fund the deal, Mobile Mini said it received a commitment from Deutsche Bank AG (DB), Bank of America (BAC, Fortune 500) and JP Morgan (JPM, Fortune 500) for a $1 billion asset-based revolving credit facility.

Mobile Mini shareholders must still approve the deal, which is expected to close as early as June. 

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