prem14a
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
 
Filed by the Registrant þ
 
Filed by a Party other than the Registrant o
 
Check the appropriate box:
 
þ  Preliminary Proxy Statement
o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o  Definitive Proxy Statement
o  Definitive Additional Materials
o  Soliciting Material Pursuant to §240.14a-12
 
MOBILE MINI, INC.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
o  No fee required.
 
þ   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
  (1)   Title of each class of securities to which transaction applies:
Common stock, par value $0.01 per share, of MSG WC Holdings Corp.
 
  (2)   Aggregate number of securities to which transaction applies:
Acquisition of all outstanding common stock of MSG WC Holdings Corp.
 
  (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
$166,500,008 (Holders of MSG WC Holdings Corp. common stock will receive an aggregate of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock of Mobile Mini, Inc. with an aggregate liquidation preference of $154,000,008 and $12,500,000 in cash, subject to closing and post-closing adjustments)
 
  (4)   Proposed maximum aggregate value of transaction:
$166,500,008
 
  (5)   Total fee paid:
$6,543.45
 
o  Fee paid previously with preliminary materials.
 
o   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
  (1)   Amount Previously Paid:
 
 
  (2)   Form, Schedule or Registration Statement No.:
 
  (3)   Filing Party:
 
  (4)   Date Filed:
 


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Subject to Completion
 
Preliminary Proxy Materials dated April 4, 2008
 
(MOBILE MINI, INC. LOGO)
 
7420 South Kyrene Road
Suite 101
Tempe, Arizona 85283
[ • ], 2008
 
Dear Stockholders:
 
MERGER PROPOSED — YOUR VOTE IS IMPORTANT
 
We cordially invite you to attend a special meeting of stockholders of Mobile Mini, Inc. to be held at [ • ], on [ • ], 2008.
 
On February 22, 2008, we and Cactus Merger Sub, Inc., a wholly owned subsidiary of Mobile Mini, Inc., entered into an Agreement and Plan of Merger, which we refer to as the Merger Agreement, with MSG WC Holdings Corp., which we refer to as Mobile Storage Group, the indirect parent of Mobile Storage Group, Inc. and Mobile Services Group, Inc., and Welsh, Carson, Anderson & Stowe X, L.P., as representative of the stockholders of MSG WC Holdings Corp., whereby Cactus Merger Sub will merge with and into MSG WC Holdings Corp. in a transaction valued at approximately $701.5 million. Pursuant to the merger, we will assume approximately $535.0 million of Mobile Storage Group’s outstanding indebtedness and will acquire all outstanding shares of Mobile Storage Group for $12.5 million in cash and 8,555,556 shares of newly issued Mobile Mini convertible redeemable participating preferred stock, which we refer to as the preferred stock, with a liquidation preference of $154.0 million, subject to certain closing and post-closing adjustments. In no event shall Mobile Mini be obligated to issue to the stockholders of Mobile Storage Group more than 8,555,556 shares of preferred stock. The preferred stock will be initially convertible into 8,555,556 shares of our common stock, representing a fully diluted ownership in Mobile Mini of approximately 19.1%.
 
At the special meeting, we will ask you to:
 
(1) approve and adopt the Merger Agreement and the merger;
 
(2) approve an amendment to our certificate of incorporation to increase the number of authorized shares of preferred stock, par value $0.01 per share, from 5,000,000 shares to 20,000,000 shares;
 
(3) approve an amendment to our certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock;
 
(4) approve the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock in connection with the merger;
 
(5) approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals; and
 
(6) approve an amendment to our certificate of incorporation to provide that the authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time.
 
This proxy statement provides information about the merger and Mobile Storage Group that holders of Mobile Mini common stock should know when they vote. We urge you to read this entire proxy statement carefully.
 
The Board of Directors of Mobile Mini unanimously recommends that holders of common stock vote “for” each of the Proposals. While each of the Proposals is being voted upon separately, each of Proposals 1, 2, 3, 4 and 5


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relate to the merger and related matters and each of Proposals 1, 2, 3 and 4 must be approved in order for any of them to be implemented and the merger to be consummated.
 
Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the special meeting, please submit a proxy as soon as possible to make sure your shares are represented at the special meeting. Please take the time to submit your proxy by following the instructions presented in this proxy statement.
 
I strongly support this combination of our companies and join with our Board of Directors in recommending that you vote in favor of each of the Proposals described in this proxy statement.
 
Steven G. Bunger
President, Chief Executive Officer and
Chairman of the Board
 
Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved the merger, passed upon the merits or fairness of the Merger Agreement or the transactions contemplated thereby, including the proposed merger, or passed upon the adequacy or accuracy of the information contained in this document. Any representation to the contrary is a criminal offense.
 
This proxy statement is dated [ • ], 2008, and is first being mailed to stockholders of Mobile Mini on or about [ • ], 2008.


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(MOBILE MINI, INC. LOGO)
 
7420 South Kyrene Road
Suite 101
Tempe, Arizona 85283
 
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
 
A special meeting of stockholders of Mobile Mini, Inc. will be held on [ • ], 2008 at [ • ], local time, at [ • ] for the following matters:
 
1. To approve and adopt the Merger Agreement by and among Mobile Mini, Cactus Merger Sub, Inc., a wholly-owned subsidiary of Mobile Mini, MSG WC Holdings Corp., the indirect parent of Mobile Storage Group, Inc. and Mobile Services Group, Inc., and Welsh, Carson, Anderson & Stowe X, L.P., as representative of the stockholders of MSG WC Holdings Corp., pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. and immediately thereafter, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini;
 
2. To approve an amendment to Mobile Mini’s certificate of incorporation to increase the number of authorized shares of preferred stock, par value $0.01 per share, from 5,000,000 shares to 20,000,000 shares;
 
3. To approve an amendment to Mobile Mini’s certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock;
 
4. To approve the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock in connection with the merger;
 
5. To approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals;
 
6. To approve an amendment to Mobile Mini’s certificate of incorporation to provide that the authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time; and
 
7. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
 
The Board of Directors of Mobile Mini unanimously recommends that you vote FOR all of the Proposals described above.
 
Only stockholders of record at the close of business on [ • ], 2008 are entitled to receive notice of and to vote at the special meeting and any adjournment or postponement of the special meeting. A list of stockholders entitled to vote will be available for examination at the meeting by any stockholder for any purpose germane to the meeting. The list will also be available for the same purpose for ten days prior to the meeting at our principal executive office at 7420 South Kyrene Road, Suite 101, Tempe, Arizona 85283
 
Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the special meeting, please submit a proxy as soon as possible to make sure your shares are represented at the special meeting. Please take the time to submit your proxy by following the instructions presented in this proxy statement.
 
By Order of the Board of Directors
 
Steven G. Bunger,
President, Chief Executive Officer and
Chairman of the Board
 
          , 2008


 

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Annex A — Merger Agreement
       
Annex B — Opinion of Oppenheimer & Co. Inc.
       


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QUESTIONS AND ANSWERS ABOUT THE MERGER
AND SPECIAL MEETING OF STOCKHOLDERS
 
The following questions and answers are intended to address briefly some commonly asked questions regarding the special meeting and the merger. These questions and answers may not address all of the information that may be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and in the documents referred to or incorporated by reference in this proxy statement. In this proxy statement, “we,” “us,” “our” and “Mobile Mini” refer to Mobile Mini, Inc., a Delaware corporation, and its subsidiaries as a combined entity, except where it is noted or the context makes clear that the reference is only to Mobile Mini, Inc. and “Mobile Storage Group” refers to MSG WC Holdings Corp., a Delaware corporation, and its subsidiaries as a combined entity, except where it is noted or the context makes clear that the reference is only to MSG WC Holdings Corp.
 
Q: What are the Merger Agreement and the merger?
 
A. On February 22, 2008 we entered into an Agreement and Plan of Merger, which we refer to as the Merger Agreement, with Cactus Merger Sub, Inc., a wholly-owned subsidiary of Mobile Mini, MSG WC Holdings Corp., the indirect parent of Mobile Storage Group, Inc. and Mobile Services Group, Inc. and Welsh, Carson, Anderson & Stowe X, L.P., or WCAS, as representative of the stockholders of MSG WC Holdings Corp., pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. Immediately after the merger, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini.
 
Q: Why am I receiving this proxy statement?
 
A. You are receiving this proxy statement because you have been identified as a holder of Mobile Mini common stock. This proxy statement is being used to solicit proxies on behalf of the Board of Directors of Mobile Mini for the special meeting. This proxy statement contains important information about the merger and related transactions and the special meeting, and you should read it carefully.
 
Q: What am I being asked to vote upon?
 
A. You are being asked to consider and vote upon the following Proposals:
 
Proposal 1 — To approve the Merger Agreement and the merger;
 
Proposal 2 — To approve an amendment to Mobile Mini’s certificate of incorporation to increase the number of authorized shares of preferred stock, par value $0.01 per share, from 5,000,000 shares to 20,000,000 shares;
 
Proposal 3 — To approve an amendment to Mobile Mini’s certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock;
 
Proposal 4 — To approve the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock;
 
Proposal 5 — To approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals; and
 
Proposal 6 — To approve an amendment to Mobile Mini’s certificate of incorporation to provide that the authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time.
 
Q: What is required to complete the merger?
 
A. To complete the merger, Mobile Mini stockholders must approve Proposals 1, 2, 3 and 4. Approval of Proposals 5 and 6 is not a condition to the completion of the merger.
 
In addition to obtaining stockholder approval, Mobile Mini and Mobile Storage Group must satisfy or waive all other closing conditions set forth in the Merger Agreement. For a more complete discussion of the conditions to the closing, see the section entitled “The Merger Agreement — Conditions to the Merger” on page 46.


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Q: Why do I need to approve the issuance of the preferred stock?
 
A. The shares of preferred stock to be issued in connection with the merger are initially convertible into 8,555,556 shares of Mobile Mini common stock, representing approximately 24.7%, at December 31, 2007, of our common stock currently outstanding. The issuance of the preferred stock in connection with the merger requires the approval of holders of Mobile Mini under NASDAQ Stock Market rules because the number of shares of common stock into which the preferred stock is convertible is in excess of 20% of the number of shares of common stock currently outstanding.
 
Q: What happens to existing shares of Mobile Mini common stock in the merger?
 
A. Because Cactus Merger Sub, Inc., a wholly-owned subsidiary of Mobile Mini, is merging with and into MSG WC Holdings Corp., the shares of Mobile Mini common stock held by Mobile Mini stockholders will not be changed by the merger and Mobile Mini stockholders will continue to hold their existing shares following completion of the merger.
 
Q: What will the Mobile Storage Group stockholders be entitled to receive pursuant to the merger?
 
A. Mobile Storage Group stockholders will be entitled to receive $12.5 million in cash and 8,555,556 shares of newly issued Mobile Mini preferred stock with a liquidation preference of $154.0 million, subject to certain closing and post-closing adjustments.
 
Q: Why does Mobile Mini need to amend its certificate of incorporation to increase the number of authorized shares?
 
A. The amendment to Mobile Mini’s certificate of incorporation authorizing additional shares of preferred stock is a condition in the Merger Agreement to the closing of the merger and is necessary for Mobile Mini to have enough authorized shares of preferred stock to issue the Series A Convertible Redeemable Participating Preferred Stock as part of the consideration for the merger.
 
Mobile Mini’s certificate of incorporation currently does not authorize a sufficient number of shares of preferred stock to issue shares of preferred stock as merger consideration. Mobile Mini is currently authorized to issue 95 million shares of common stock and 5 million shares of preferred stock. As of the date of this proxy statement, no shares of Mobile Mini preferred stock were issued and outstanding. Mobile Mini must issue 8,555,556 shares of the Series A Convertible Redeemable Participating Preferred Stock in the merger. Authorizing additional shares of preferred stock is required to enable Mobile Mini to have sufficient shares of preferred stock authorized for issuance in the merger.
 
Q: When do you expect the merger to be completed?
 
A. We anticipate that the closing of the merger will occur promptly after the date of the special meeting if the requisite stockholder approvals are received, assuming the other conditions to closing of the merger are satisfied or waived. For more information, see “The Merger Agreement — Conditions to the Merger” on page 46.
 
Q: Am I entitled to appraisal rights?
 
A. Holders of Mobile Mini common stock are not entitled to appraisal rights in connection with the merger under the General Corporation Law of the State of Delaware or Mobile Mini’s certificate of incorporation.
 
Q: Who may vote at the special meeting?
 
A. Holders of record of common stock at the close of business on [ • ], 2008, which we refer to as the record date, are entitled to notice of and to vote at the special meeting. At the record date, [ • ] shares of common stock of Mobile Mini were issued and outstanding. A list of stockholders entitled to vote will be available for examination at the meeting by any stockholder for any purpose germane to the meeting. The list will also be available for the same purpose for ten days prior to the meeting at our principal executive office at 7420 South Kyrene Road, Suite 101, Tempe, Arizona 85283.
 
Q: How many votes do Mobile Mini stockholders have?
 
A. Each holder of record of Mobile Mini common stock as of the close of business on the record date will be entitled to one vote, in person or by proxy, for each share of Mobile Mini common stock held in his, her or its name on the books of Mobile Mini on that date.


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As of the record date, directors and executive officers of Mobile Mini and their affiliates as a group beneficially owned and were entitled to vote approximately [1,083,106] shares of Mobile Mini common stock, representing approximately [ • ]% of the votes entitled to be cast at the special meeting. All of the directors and executive officers of Mobile Mini who are entitled to vote at the special meeting have indicated that they intend to vote their shares of Mobile Mini common stock in favor each of the Proposals, although such persons have not entered into agreements obligating them to do so.
 
Q: What stockholder approvals are required for Mobile Mini?
 
A. Proposals 4 and 5 require the affirmative vote of a majority of those shares present in person or represented by proxy and entitled to vote thereon at the special meeting.
 
Proposals 1, 2, 3 and 6 require the affirmative vote of holders of at least a majority of our outstanding common stock.
 
Q: Why did I receive more than one proxy card?
 
A. You will receive multiple proxy cards if you hold your shares in multiple accounts or in different ways (e.g., custodial accounts, trusts, joint tenancy). If your shares are held by a broker (i.e., in “street name”), you will receive your proxy card or other voting information from your broker, and you will need to return your proxy card or cards to your broker.
 
Q: What constitutes a quorum?
 
A. In order to conduct business at the special meeting, a quorum must be present. The holders of a majority of the votes entitled to be cast at the special meeting, present in person or represented by proxy, constitute a quorum under Mobile Mini’s bylaws. Mobile Mini will treat shares of Mobile Mini’s common stock represented by a properly signed and returned proxy, including abstentions and broker non-votes, as present at the Mobile Mini special meeting for the purposes of determining the existence of a quorum.
 
Q: How are votes counted?
 
A. For all Proposals, you may vote “for,” “against” or “abstain.” If you “abstain,” it has the same effect as a vote “against” Proposals 1, 2, 3 and 6. Abstentions will have no effect on Proposals 4 and 5 but will reduce the number of votes required to approve this Proposal. With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board of Directors of Mobile Mini or, if no recommendation is given, in their own discretion.
 
Q: What are the Board’s recommendations on how I should vote my shares?
 
A. The Board of Directors of Mobile Mini recommends that you vote your shares “FOR” each of the Proposals.
 
While each of the Proposals is being voted upon separately, each of Proposals 1, 2, 3, 4 and 5 relate to the merger and related matters and each of Proposals 1, 2, 3 and 4 must be approved in order for any of them to be implemented and the merger to be consummated.
 
Q: When and where is the special meeting?
 
A. A special meeting of stockholders will be held on [ • ], 2008 at [ • ] [a/p].m. local time at [ • ].
 
Q: What is the difference between a “shareholder of record” and a “street name” holder?
 
A. These terms describe how shares are held. If your shares are registered directly in your name with Wells Fargo Shareowner Services, our transfer agent, you are a “shareholder of record.” If your shares are held in the name of a brokerage, bank, trust or other nominee as a custodian, you are a “street name” holder.
 
Q: What do I need to do now and how do I vote?
 
A. We encourage you to read this proxy statement carefully, including its annexes, and then vote your proxy for the relevant Proposals.
 
If you are a “shareholder of record,” you have several choices. You can vote your proxy:
 
• by mailing the enclosed proxy card using the enclosed envelope;
 
• over the telephone; or
 
• via the Internet.


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Please refer to the specific instructions set forth on the enclosed proxy card.
 
If you hold your shares in “street name,” your broker/bank/trust/nominee will provide you with materials and instructions for voting your shares. Please follow those instructions carefully
 
Q: Can I vote my shares in person at the special meeting?
 
A. If you are a “shareholder of record,” you may vote your shares in person at the special meeting. If you hold your shares in “street name,” you must obtain a legal proxy from your broker, banker, trustee or nominee, giving you the right to vote the shares at the special meeting.
 
Q: May I change my vote after I have submitted my proxy?
 
A. Yes.  You may revoke your proxy by doing one of the following:
 
• by sending a written notice of revocation to the Secretary of Mobile Mini that is received by Mobile Mini prior to the special meeting, stating that you revoke your proxy;
 
• by signing a later-dated proxy card and submitting it so that it is received prior to the special meeting in accordance with the instructions included in the proxy card(s); or
 
• by attending the special meeting and voting your shares in person.
 
Q: Are there risks associated with the merger that stockholders of Mobile Mini should be aware of?
 
A. In deciding how to vote your shares of common stock on the matters described in this proxy statement, you should carefully consider the risks related to the merger and the other risks described in Part I, Item 1A of Mobile Mini’s Annual Report on Form 10-K for the year ended December 31, 2007, which risks are incorporated herein by reference. See “Where You Can Find More Information” beginning on page 94 of this proxy statement.
 
Q: Who is paying for this proxy solicitation?
 
A. Mobile Mini pays the costs of soliciting proxies. We have retained Morrow & Co., LLC to assist in the solicitation of proxies. We will pay Morrow & Co., LLC $7,500 plus out-of-pocket expenses for its assistance. Upon request, we will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of shares of our common stock.
 
Q: Is this proxy statement the only way that proxies are being solicited?
 
A. In addition to mailing these proxy materials, certain directors, officers or employees of Mobile Mini may solicit proxies by telephone, facsimile, e-mail or personal contact. They will not be specifically compensated for doing so.
 
Q: Who can help answer my questions?
 
A. If you would like to receive additional copies of this proxy statement, without charge, or if you have questions about the special meeting, including the procedures for voting your shares, you should contact our proxy solicitor Morrow & Co., LLC at:
 
(800) 607-0088 (U.S. and Canada)
(203) 658-9400 (International)
 
You may also obtain additional information about Mobile Mini from the documents we file with the Securities and Exchange Commission, or SEC, or by following the instructions in the section entitled “Where You Can Find More Information” on page 94.


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SUMMARY
 
The following summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. You should carefully read this proxy statement, including the annexes, and the other documents we refer to or incorporate by reference, for a more complete understanding of the merger and other Proposals described in this summary term sheet. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions in the section entitled “Where You Can Find More Information” that begins on page 94 of this proxy statement. We have included page references to direct you to more complete descriptions of the topics presented in this summary.
 
Mobile Mini
 
We were founded in 1983 and we believe we are one of the largest providers of portable storage solutions in the United States through our total lease fleet of 160,100 portable storage and portable office units at December 31, 2007. We offer a wide range of portable storage products in varying lengths and widths with an assortment of differentiated features such as our proprietary security systems, multiple doors, electrical wiring and shelving. At December 31, 2007, we operated through a network of 56 branches located in the United States, three in Canada, six in the United Kingdom, and one in The Netherlands. Our portable units provide secure, accessible temporary storage for a diversified client base of approximately 93,000 customers, including large and small retailers, construction companies, medical centers, schools, utilities, distributors, the U.S. and U.K. military, hotels, restaurants, entertainment complexes and households. Our customers use our products for a wide variety of storage applications, including retail and manufacturing inventory, construction materials and equipment, documents and records and household goods. Based on an independent market study, we believe our customers are engaged in a vast majority of the industries identified in the four-digit SIC (Standard Industrial Classification) manual published by the U.S. Bureau of the Census. During the twelve months ended December 31, 2007, we generated revenues of approximately $318.3 million and had a net income of approximately $44.2 million.
 
Our common stock trades on The Nasdaq Global Select Market under the symbol “MINI.” We maintain our principal executive offices at 7420 S. Kyrene Road, Suite 101, Tempe, Arizona 85283. Our telephone number is (480) 894-6311, and our Internet address is www.mobilemini.com. Information contained on our website does not constitute part of this proxy statement.
 
Mobile Storage Group (page 81)
 
Mobile Storage Group is a leading international provider of portable storage products with a lease fleet of over 120,000 units and 87 branch locations throughout the U.S. and U.K. It focuses on leasing portable storage containers, storage trailers and mobile offices, and, to complement its core leasing business, also sells portable storage products. Its storage containers and storage trailers provide secure, convenient and cost-effective on-site storage of inventory, construction supplies, equipment and other goods. Its mobile office units provide temporary office space and employee facilities for, among other uses, construction sites, trade shows, special events and building refurbishments. During 2007, Mobile Storage Group leased or sold portable storage products to over 45,000 customers in diverse end markets ranging from large companies with a national presence to small local businesses. For the twelve months ended December 31, 2007, Mobile Storage Group generated revenues of approximately $233.1 million and had income from continuing operations of approximately $3.8 million.
 
MSG WC Holdings Corp. owns 100% of the capital stock of MSG WC Intermediary Co., which owns 100% of the capital stock of Mobile Services Group, Inc., which owns 100% of the capital stock of Mobile Storage Group, Inc.
 
The address of MSG WC Holdings Corp.’s principal executive offices is: c/o Mobile Storage Group, Inc., 700 North Brand Boulevard, 10th Floor, Glendale, California 91203, and its telephone number is 818-253-3200.
 
Why You are Receiving this Proxy Statement (page 20)
 
In order to complete the merger, at the special meeting to be held on [ • ], 2008, holders of Mobile Mini common stock must approve the Merger Agreement and the merger, the amendment to our certificate of


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incorporation to increase the authorized shares of preferred stock and to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Stock and the issuance of the Series A Convertible Redeemable Participating Preferred Stock to the stockholders of Mobile Storage Group. The holders of Mobile Mini common stock will also be asked to approve the other Proposals described in this proxy statement, which are not a condition to the completion of the merger.
 
The Merger (page 23)
 
On February 22, 2008, we entered into the Merger Agreement, with Cactus Merger Sub, Inc., a wholly-owned subsidiary of Mobile Mini, MSG WC Holdings Corp., the indirect parent of Mobile Storage Group, Inc. and Mobile Services Group, Inc., and WCAS, as representative of the stockholders of MSG WC Holdings Corp., pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. Immediately after the merger, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini.
 
Pursuant to the Merger Agreement, Mobile Mini will assume approximately $535.0 million of the Mobile Storage Group’s outstanding indebtedness and will acquire all outstanding shares of capital stock of Mobile Storage Group for $12.5 million in cash and 8,555,556 shares of newly issued Mobile Mini preferred stock with a liquidation preference of $154.0 million, subject to certain closing and post-closing adjustments. In no event shall Mobile Mini be obligated to issue to the stockholders of Mobile Storage Group more than 8,555,556 shares of preferred stock. The preferred stock will be initially convertible into 8,555,556 shares of Mobile Mini’s common stock, representing a fully diluted ownership in Mobile Mini of approximately 19.1%. The assumed debt includes $200.0 million in aggregate principal amount of the 93/4% Senior Notes due 2014, or Mobile Storage Group’s Senior Notes, issued by Mobile Services Group, Inc. and Mobile Storage Group, Inc., which will remain outstanding after the closing of the merger. Other than Mobile Storage Group’s Senior Notes and certain notes payables and capitalized lease obligations, we intend to refinance the remaining assumed debt at the closing of the merger with cash on hand and/or a portion of the proceeds from our expected $1.0 billion asset-based revolving credit facility.
 
Proposal 1: The Merger Agreement and the Merger (page 20)
 
Mobile Mini is asking holders of common stock to approve and adopt the Merger Agreement and the merger.
 
Proposal 2: Amendment to Mobile Mini’s Certificate of Incorporation to Authorize Additional Shares of Preferred Stock (page 20)
 
The amendment to Mobile Mini’s certificate of incorporation authorizing additional shares of preferred stock is required under the terms of the Merger Agreement and is necessary to enable Mobile Mini to have enough shares of authorized preferred stock to issue shares of preferred stock in connection with the merger. The amendment, if approved by Mobile Mini’s stockholders, would result in an increase to the authorized number of shares of preferred stock of Mobile Mini from 5,000,000 shares to 20,000,000 shares and a corresponding increase to Mobile Mini’s total number of authorized shares of capital stock from 100,000,000 shares to 115,000,000 shares. The authorized number of shares of common stock would remain unchanged at 95,000,000 shares.
 
Proposal 3: Amendment to Mobile Mini’s Certificate of Incorporation to Authorize Designation of Series A Convertible Redeemable Participating Preferred Stock (page 20)
 
The amendment to Mobile Mini’s certificate of incorporation authorizing the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock, which we refer to as preferred stock, is required under the terms of the Merger Agreement and is necessary to enable Mobile Mini to issue such shares of preferred stock in connection with the merger. The amendment, if approved by Mobile Mini’s stockholders, would authorize Mobile Mini to issue 8,555,556 shares of preferred stock.
 
Each share of preferred stock will have a liquidation preference of $18.00, subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations and like occurrences and will be convertible into one share of Mobile Mini’s common stock, subject to adjustment from time to time as provided in the certificate of designation. The preferred stock will be mandatorily convertible into Mobile Mini common stock if, after the first anniversary of the issuance of the preferred stock, Mobile Mini’s common stock trades above $23.00 per share for a


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period of 30 consecutive trading days. The preferred stock will not have any cash or payment-in-kind dividends (unless a dividend is paid with respect to the common stock, in which case dividends will be paid on the preferred stock on an equal basis with the common stock, on an as-converted basis), will not impose any covenants upon Mobile Mini, and will include an optional redemption feature following the tenth anniversary of the issue date and upon certain change of control events at the request of a majority of the holders of the preferred stock. Holders of shares of preferred stock will be entitled to vote, voting together with the holders of common stock as a single class, on all matters on which holders of common stock are entitled to vote, on an as-converted basis.
 
Proposal 4: Approval of Issuance of Series A Convertible Redeemable Participating Preferred Stock (page 22)
 
We are seeking stockholder approval to issue 8,555,556 shares of preferred stock as part of the consideration for the merger. At December 31, 2007, these preferred shares, if assumed to be converted into 8,555,556 shares of common stock, would represent approximately 24.7% of our common stock outstanding before the completion of the merger. The issuance of the preferred stock in connection with the merger requires the approval of holders of Mobile Mini under NASDAQ Stock Market rules because the number of shares of common stock into which the preferred stock is convertible is in excess of 20% of the number of shares of common stock currently outstanding.
 
Proposal 5: Approval of Adjournments or Postponements of the Special Meeting (page 22)
 
Mobile Mini is asking holders of common stock to approve adjournments or postponements of the special meeting if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals.
 
Approval of Proposal 5 is not a condition to the completion of the merger.
 
Proposal 6: Amendment to Mobile Mini’s Certificate of Incorporation to Authorize the Board of Directors of Mobile Mini to Determine Terms of Preferred Stock (page 22)
 
The amendment, if approved by Mobile Mini’s stockholders, would provide that authorized preferred stock of Mobile Mini may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time.
 
The amendment will provide Mobile Mini with increased financial flexibility in meeting future capital requirements by allowing undesignated preferred stock to be available with such features as determined by the Board of Directors of Mobile Mini for any proper corporate purpose without further stockholder approval. It is anticipated that such purposes may include the issuance of preferred stock for cash as a means of obtaining capital for use by Mobile Mini, or issuance as part or all of the consideration required to be paid by Mobile Mini for acquisitions of other businesses or assets. This amendment is not being proposed as a means of preventing or dissuading a hostile or coercive change in control or takeover of Mobile Mini. However, the undesignated preferred stock could be used for such a purpose. If the undesignated preferred stock were to be issued (i) in connection with a stockholder rights plan, also known as a “poison pill” plan, or (ii) to purchasers supporting the Board of Directors of Mobile Mini in resisting a specific takeover proposal, such issuance could have the effect of delaying or preventing a change of control of Mobile Mini by increasing the number of outstanding shares entitled to vote and by increasing the number of votes required to approve a change of control of Mobile Mini.
 
Approval of Proposal 6 is not a condition to the completion of the merger.
 
Board Recommendation (page 26)
 
The Board of Directors of Mobile Mini unanimously recommends a vote “FOR” each of the Proposal described above. While each of the Proposals is being voted upon separately, each of Proposals 1, 2, 3, 4 and 5 relate


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to the merger and related matters and each of Proposals 1, 2, 3 and 4 must be approved in order for any of them to be implemented and the merger to be consummated.
 
Opinion of Mobile Mini’s Financial Advisor (page 28)
 
In connection with the merger, the Board of Directors of Mobile Mini received a written opinion, dated February 21, 2008, of Mobile Mini’s financial advisor, Oppenheimer & Co. Inc., or Oppenheimer, as to the fairness, from a financial point of view and as of the date of the opinion, to Mobile Mini of the aggregate consideration to be paid in the merger by Mobile Mini. The full text of Oppenheimer’s written opinion, dated February 21, 2008, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached to this proxy statement as Annex B. Oppenheimer’s opinion was provided to the Board of Directors of Mobile Mini in connection with its evaluation of the aggregate consideration from a financial point of view to Mobile Mini. Oppenheimer’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matters relating to the merger.
 
Expected Timing of the Merger (page 38)
 
We anticipate that the closing of the merger will occur promptly after the date of the special meeting if the requisite stockholder approvals are received, assuming the other conditions to closing of the merger are satisfied or waived.
 
Conditions to Completion of the Merger (page 46)
 
Completion of the merger is subject to various conditions, including, among others, (a) approval of the merger by the holders of a majority of the outstanding shares of Mobile Mini common stock, (b) the accuracy of the representations and warranties of Mobile Mini and Mobile Storage Group, as the case may be, in all respects, with respect to authority and enforceability, consents and approvals and no violations, capitalization (other than, with respect to de minimis variations in the number of outstanding shares of common stock of Mobile Mini or Mobile Storage Group, as the case may be), subsidiaries’ capitalization, and no material adverse effect (and absence of certain changes with respect to Mobile Storage Group) since September 30, 2007 to February 22, 2008, on and as of the closing date with the same effect as though such representations and warranties had been made on and as of such date, (c) the accuracy of all other representations and warranties of Mobile Mini and Mobile Storage Group, as the case may be, without giving effect to any “materiality,” “material adverse effect” or similar qualifiers contained in any of such representations and warranties, as of the closing date with the same effect as though such representations and warranties had been made on and as of such date (other than those made as of a specified date, which shall be true and correct in all respects as of such specified date), except for such failures to be true and correct that do not have and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Mobile Mini or Mobile Storage Group, as the case may be, (d) the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, or HSR, (e) no occurrence of events, facts, circumstances, changes or effects, individually or in the aggregate, constituting a material adverse effect on Mobile Mini or Mobile Storage Group, as the case may be, since February 22, 2008, and (f) Mobile Mini’s receipt of the amounts set forth in the commitment letter upon the terms and conditions of the commitment letter or any alternative financing in accordance with the Merger Agreement.
 
Financing of the Merger (page 34)
 
In connection with the merger, we expect to enter into a $1.0 billion asset-based revolving credit facility. The security for the credit facility will include a lien on substantially all of the combined company’s present and future assets. Mobile Mini plans to use a portion of the proceeds from the credit facility to repay a portion of the approximately $535.0 million indebtedness of Mobile Storage Group, the $12.5 million cash component of the merger consideration, the $24.5 million estimated amount of transaction costs related to the merger, and to refinance outstanding amounts under our existing revolving credit facility.


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Termination of the Merger Agreement; Fees Payable (page 49)
 
The Merger Agreement contains certain termination rights for both Mobile Mini and Mobile Storage Group, and further provides that, upon termination of the Merger Agreement under specified circumstances, Mobile Mini may be required to reimburse Mobile Storage Group for all reasonable, documented out-of-pocket costs and expenses of Mobile Storage Group incurred in connection with the negotiation and execution of the Merger Agreement and the evaluation of the transactions contemplated thereby up to a maximum of $3.0 million.
 
Governmental and Regulatory Matters (page 33)
 
To complete the merger, Mobile Mini and Mobile Storage Group must make certain filings under HSR and all applicable waiting periods under HSR must have expired or otherwise terminated. Mobile Mini and Mobile Storage Group filed pre-merger notifications on March 5, 2008 and the applicable waiting periods under HSR have not yet expired or otherwise been terminated.
 
No Appraisal Rights (page 34)
 
Holders of Mobile Mini common stock are not entitled to appraisal rights in connection with the merger under the General Corporation Law of the State of Delaware or Mobile Mini’s certificate of incorporation.
 
Risk Factors
 
In deciding how to vote your shares of common stock on the matters described in this proxy statement, you should carefully consider the risks related to the merger and the other risks described in Part I, Item 1A of Mobile Mini’s Annual Report on Form 10-K for the year ended December 31, 2007, which risks are incorporated herein by reference. See “Where You Can Find More Information” beginning on page 94 of this proxy statement.


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
Some of the statements contained or incorporated by reference in this proxy statement, including those relating to Mobile Mini’s, Mobile Storage Group’s and the combined company’s strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “will,” “should,” “may,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” and similar expressions, are forward-looking statements. Forward looking statements include the information concerning possible or assumed future results of operations of Mobile Mini, Mobile Storage Group and the combined company as set forth under “The Merger — Reasons for the Merger; Recommendation of the Board of Directors of Mobile Mini” beginning on page 26. These statements are not historical facts but instead represent only expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict, which may include the risk factors set forth above and other market, business, legal and operational uncertainties discussed elsewhere in this document and the documents which are incorporated herein by reference. Those uncertainties include, but are not limited to those risks described in Part I, Item 1A of Mobile Mini’s annual report on Form 10-K for the year ended December 31, 2007, which risks are incorporated herein by reference. See “Where You Can Find More Information.”
 
Mobile Mini undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.


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PRICE RANGE OF MOBILE MINI COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
 
Our common stock trades on The Nasdaq Global Select Market under the symbol “MINI”. The following are the high and low sale prices for the common stock during the periods indicated as reported by the Nasdaq Stock Market after giving effect to a two-for-one stock split effected on March 10, 2006.
 
                 
    High     Low  
 
Quarterly for 2006:
               
First Quarter
  $ 31.32     $ 25.70  
Second Quarter
  $ 37.12     $ 26.64  
Third Quarter
  $ 31.98     $ 25.95  
Fourth Quarter
  $ 33.35     $ 26.85  
Quarterly for 2007:
               
First Quarter
  $ 29.40     $ 25.12  
Second Quarter
  $ 33.65     $ 26.30  
Third Quarter
  $ 32.01     $ 21.56  
Fourth Quarter
  $ 25.23     $ 16.50  
Quarterly for 2008:
               
First Quarter
  $ 20.13       14.07  
 
We had approximately 205 holders of record of our common stock on March 27, 2008, and we estimate that we have more than 5,000 beneficial owners of our common stock.
 
We have not paid cash dividends on our common stock and do not expect to do so in the foreseeable future, as we intend to retain all earnings to provide funds for the operation and expansion of our business. Further, our revolving credit agreement, the indenture governing our senior notes and the indenture governing Mobile Storage Group’s Senior Notes (which we will assume and which will remain outstanding after the closing of the merger) restrict our ability to pay dividends or other distributions on our common stock. In the future we may enter into agreements that may restrict our ability to pay dividends or other distributions on our common stock.


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CAPITALIZATION
 
The following table shows Mobile Mini’s capitalization as of December 31, 2007 on an actual and pro forma basis. The “actual” column reflects our capitalization as of December 31, 2007 on a historical basis, without any adjustments to reflect subsequent or anticipated events. The “pro forma” column reflects our capitalization as of December 31, 2007 with adjustments to reflect:
 
  •  the issuance of 8,555,556 shares of the Series A Convertible Redeemable Participating Preferred Stock to Mobile Storage Group stockholders; and
 
  •  borrowings under the proposed new $1.0 billion asset-based revolving credit facility and application of the proceeds therefrom, including the repayment of indebtedness of Mobile Storage Group to be assumed in connection with the merger.
 
                 
    December, 31, 2007  
    Actual     Pro Forma  
    (In millions)  
 
Cash and cash equivalents
  $ 3.7     $ 6.0  
                 
Debt:
               
Revolving credit facility
  $ 237.9     $ 603.0  
Notes payable
    0.7       1.6  
Capitalized lease obligations
          6.7  
6.875% Senior Notes due 2015
    149.4       149.4  
9.75% Senior Notes due 2014, at fair value(1)
          184.0  
                 
Total debt
    388.0       944.7  
Convertible preferred stock(2)
          154.0  
Stockholders’ equity
    457.9       457.9  
                 
Total capitalization
  $ 845.9     $ 1,556.6  
                 
 
 
(1) Mobile Storage Group’s Senior Notes recorded at their fair value at December 31, 2007.
 
(2) Liquidation preference at issuance.


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SELECTED FINANCIAL DATA OF MOBILE MINI
 
The following table sets forth selected historical consolidated financial information of Mobile Mini for the periods presented. The selected financial information, as of December 31, 2007, and for each of the five fiscal years then ended, has been derived from Mobile Mini’s audited consolidated financial statements. This financial information and other data should be read in conjunction with the respective audited consolidated financial statements of Mobile Mini, including the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated in this proxy statement by reference. See “Where You Can Find More Information” beginning on page 94. This information should also be read in conjunction with the unaudited pro forma condensed consolidated financial statements beginning on page 57.
 
                                         
    Year Ended December 31,  
    2003     2004     2005     2006     2007  
    (In thousands, except per share data)  
 
Consolidated Statements of Income Data:
                                       
Revenues:
                                       
Leasing
  $ 128,482     $ 149,856     $ 188,578     $ 245,105     $ 284,638  
Sales
    17,248       17,919       17,499       26,824       31,644  
Other
    838       566       1,093       1,434       2,020  
                                         
Total revenues
    146,568       168,341       207,170       273,363       318,302  
                                         
Costs and expenses:
                                       
Cost of sales
    11,487       11,352       10,845       17,186       21,651  
Leasing, selling and general expenses
    80,124       90,696       109,257       139,906       166,994  
Florida litigation expense
    8,502                          
Depreciation and amortization
    10,026       11,427       12,854       16,741       21,149  
                                         
Total costs and expenses
    110,139       113,475       132,956       173,833       209,794  
                                         
Income from operations
    36,429       54,866       74,214       99,530       108,508  
Other income (expense):
                                       
Interest income
    2             11       437       101  
Other income
                3,160              
Interest expense
    (16,299 )     (20,434 )     (23,177 )     (23,681 )     (24,906 )
Debt restructuring/extinguishment expense
    (10,440 )                 (6,425 )     (11,224 )
Foreign currency exchange gain
                      66       107  
                                         
Income before provision for income taxes
    9,692       34,432       54,208       69,927       72,586  
Provision for income taxes
    3,780       13,773       20,220       27,151       28,410  
                                         
Net income
  $ 5,912     $ 20,659     $ 33,988     $ 42,776     $ 44,176  
                                         
Earnings per share:
                                       
Basic
  $ 0.21     $ 0.71     $ 1.14     $ 1.25     $ 1.24  
                                         
Diluted
  $ 0.20     $ 0.70     $ 1.10     $ 1.21     $ 1.22  
                                         
Weighted average number of common and common share equivalents outstanding:
                                       
Basic
    28,625       28,974       29,867       34,243       35,489  
Diluted
    28,925       29,565       30,875       35,425       36,296  
 
                                         
    At December 31,  
    2003     2004     2005     2006     2007  
    (In thousands)  
 
Consolidated Balance Sheet Data:
                                       
Lease fleet, net
  $ 383,672     $ 454,106     $ 550,464     $ 697,439     $ 802,923  
Total assets
    515,080       592,146       704,957       900,030       1,028,851  
Total debt
    240,610       277,044       308,585       302,045       387,989  
Stockholders’ equity
    189,293       216,369       267,975       442,004       457,890  


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SELECTED FINANCIAL DATA OF MOBILE STORAGE GROUP
 
The following tables set forth the selected historical consolidated financial data of Mobile Storage Group for the periods indicated. Mobile Services Group, Inc. was acquired by MSG WC Holdings Corp. on August 1, 2006. The financial data for periods prior to August 1, 2006 are derived from the financial statements of Mobile Services Group, Inc. (predecessor) prior to its acquisition by MSG WC Holdings Corp. (successor). The selected historical consolidated financial data for the fiscal year ended December 31, 2005, the periods from January 1, 2006 to August 1, 2006, and from August 2, 2006 to December 31, 2006, for the fiscal year ended December 31, 2007 and the consolidated balance sheet information as of December 31, 2006 and 2007 are derived from the audited consolidated financial statements of MSG WC Holdings Corp. included in this proxy statement. The selected historical consolidated financial data as of and for the fiscal year ended December 31, 2003 and 2004 and the consolidated balance sheet information as of December 31, 2005 are derived from the audited consolidated financial statements of Mobile Services Group, Inc. not included in this proxy statement. The financial information set forth below should be read in conjunction with Mobile Storage Group’s financial statements and the related notes, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in this proxy statement.
 
                                                 
                      Period from
    Period from
       
                      January 1,
    August 2,
       
                      2006 to
    2006 to
    Year Ended
 
    Year Ended December 31,     August 1,
    December 31,
    December 31,
 
    2003     2004     2005     2006     2006     2007  
    Predecessor     Successor  
    (In thousands)  
 
Statement of Operations Data:
                                               
Revenues:
                                               
Lease and lease related
  $ 113,975     $ 127,040     $ 143,417     $ 91,088     $ 75,596     $ 192,318  
Sales
    31,064       29,336       35,584       22,410       14,812       40,809  
                                                 
Total revenues
    145,039       156,376       179,001       113,498       90,408       233,127  
Costs and expenses:
                                               
Cost of sales
    23,064       21,636       27,114       16,223       10,289       28,784  
Trucking and yard costs
    35,858       40,811       44,764       27,965       23,053       58,833  
Depreciation and amortization
    13,806       14,502       19,471       12,191       8,223       22,216  
Selling, general and administrative expenses
    39,037       42,129       46,909       31,403       24,135       67,307  
Other selling, general and administrative expenses — stock related compensation
                      700       1,662       3,168  
Restructuring
                                   
Management fees to majority stockholder
    445       422       400       329       29        
Abandoned offering costs
    (613 )                              
Charge for lease fleet impairment
          9,155                          
Acquisition transaction expenses
                      40,306              
                                                 
Income (loss) from operations
    33,442       27,721       40,343       (15,619 )     23,017       52,819  
Other income (expense)
                                               
Interest expense, net
    (20,393 )     (23,096 )     (26,249 )     (15,557 )     (19,877 )     (51,218 )
Foreign currency transaction gain (loss)
    7,267       1,013       (1,386 )     212       74       714  
Loss on early extinguishment of debt
    (1,424 )           (780 )                  
Other income (expense)
    (26 )     270       (241 )     (84 )     (58 )     (141 )
                                                 
Income (loss) from continuing operations before provision (benefit) for income taxes
    18,866       5,908       11,687       (31,048 )     3,156       2,174  
Provision (benefit) for income taxes
    7,449       2,539       4,652       (9,240 )     1,044       (1,618 )
                                                 
Income (loss) from continuing operations
    11,417       3,369       7,035       (21,808 )     2,112       3,792  
Income (loss) from discontinued operations (net of tax provision (benefit) of $871, $300, $122, $225, $125, and $(697) for the years 2003, 2004, 2005, the periods from January 1 to August 1, 2006 and August 2 to December 31, 2006, and the year 2007, respectively)
    1,307       451       184       337       188       (1,110 )
                                                 
Net income (loss)
  $ 12,724     $ 3,820     $ 7,219     $ (21,471 )   $ 2,300     $ 2,682  
                                                 
 


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    As of December 31,     December 31,
 
    2003     2004     2005     2006     2007  
    Predecessor     Successor     Successor  
    (In thousands)  
 
Balance Sheet Data:
                                       
Lease equipment, net
  $ 228,893     $ 246,492     $ 257,498     $ 297,776     $ 344,415  
Total assets
    371,350       402,934       415,161       759,299       836,020  
Total debt
    217,547       238,987       250,247       458,545       522,354  
Stockholder’s equity
    82,226       86,838       80,864       193,454       201,579  

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
 
The following tables present, as of December 31, 2007 and for the year ended December 31, 2007, selected unaudited pro forma condensed combined financial data of Mobile Mini and has been prepared using the purchase method of accounting. The unaudited pro forma condensed combined statement of operations data gives effect to the merger as if it had occurred on January 1, 2007 and the unaudited pro forma condensed combined balance sheet data gives effect to the merger as if it had occurred on December 31, 2007.
 
You should read this information in conjunction with (i) the separate historical consolidated financial statements and accompanying notes of Mobile Mini incorporated by reference into this proxy statement, (ii) the separate historical consolidated financial statements and accompanying notes of Mobile Storage Group included in this proxy statement and (iii) the unaudited pro forma condensed combined financial statements and accompanying notes included elsewhere in this proxy statement. See “Unaudited Pro Forma Condensed Combined Financial Statements” and “Where You Can Find More Information” beginning on page 57 and page 94, respectively.
 
The selected unaudited pro forma condensed combined financial data is provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Mobile Mini would have been had the business combination with Mobile Storage Group occurred on the respective date assumed, nor are they necessarily indicative of future consolidated operating results or financial position.
 
The selected unaudited pro forma condensed combined financial data does not reflect anticipated benefits derived from combined synergies, operating efficiencies and cost savings that are expected to result from the acquisition, and does not give benefits to expected expansion to be derived from the combined company’s growth projects nor changes in leasing yield subsequent to the date of such unaudited pro forma condensed combined financial data. The data also does not include the anticipated integration costs that we expect to incur after the completion of the merger.
 
         
    Year Ended
 
    December 31, 2007  
    (In thousands except per share data)  
 
Pro Forma Statement of Operations Data:
       
Revenues
  $ 551,429  
Total operating expenses
    389,544  
Income from operations
    161,885  
Income from continuing operations
    52,929  
Earnings per share:
       
Basic
    1.20  
Diluted
    1.18  
 
         
    As of
 
    December 31, 2007  
    (In thousands)  
 
Pro Forma Balance Sheet Data:
       
Lease fleet, net
  $ 1,087,293  
Total assets
    1,873,056  
Total debt
    944,704  
Convertible Preferred Stock
    153,990  
Stockholders’ equity
    457,890  


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INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
 
Mobile Mini is furnishing this proxy statement to you in order to provide you with important information regarding the matters to be considered at the special meeting and at any adjournment or postponement of the special meeting. Mobile Mini first mailed this proxy statement and the accompanying form of proxy to its stockholders on or about [ • ], 2008.
 
Special Meeting Date, Time and Place
 
A special meeting of stockholders will be held on [ • ], 2008 at [ • ] [a/p].m. local time at [ • ].
 
Agenda
 
At the special meeting, stockholders of Mobile Mini will be asked to consider and vote upon the following Proposals:
 
  •  Proposal 1:  To approve the Merger Agreement and the merger;
 
  •  Proposal 2:  To approve an amendment to Mobile Mini’s certificate of incorporation to increase the authorized number of shares of preferred stock of Mobile Mini from 5,000,000 shares, $0.01 par value per share, to 20,000,000 shares, $0.01 par value per share, and correspondingly increase Mobile Mini’s total number of authorized shares of capital stock from 100,000,000 shares to 115,000,000 shares;
 
  •  Proposal 3:  To approve an amendment to Mobile Mini’s certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock;
 
  •  Proposal 4:  To approve the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock to holders of Mobile Storage Group as partial consideration in the merger;
 
  •  Proposal 5:  To approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals; and
 
  •  Proposal 6:  To approve an amendment to our certificate of incorporation to provide that the authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time.
 
These Proposals are being voted upon separately, and only approval of Proposals No. 1, 2, 3 and 4 is a condition to completion of the merger.
 
Record Date; Stockholders Entitled to Vote
 
Only stockholders of record at the close of business on [ • ], 2008 are entitled to receive notice of and to vote at the meeting and any adjournment or postponement of the special meeting.
 
As of the record date, directors and executive officers of Mobile Mini and their affiliates as a group beneficially owned and were entitled to vote approximately [1,083,106] shares of Mobile Mini common stock, representing approximately [ • ]% of the votes entitled to be cast at the special meeting. All of the directors and executive officers of Mobile Mini who are entitled to vote at the special meeting have indicated that they intend to vote their shares of Mobile Mini common stock in favor of each of the Proposals.
 
Voting and Revocation of Proxies
 
The proxy accompanying this proxy statement is solicited on behalf of the Board of Directors of Mobile Mini for use at the special meeting.
 
General.  Assuming a quorum is present, shares represented by a properly signed and dated proxy will be voted at the special meeting in accordance with the instructions indicated on the proxy. Proxies that are properly signed and dated but that do not contain voting instructions will be voted FOR each of the Proposals.


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Abstentions.  Mobile Mini will count a properly executed proxy marked “abstain” with respect to a particular Proposal as present for purposes of determining whether a quorum is present. If you “abstain” from voting with respect to Proposals 1, 2, 3 and 6 it will have the same effect as if you voted “against” such Proposal.
 
Broker Non-Votes.  Proxies submitted by brokers that do not indicate a vote for some or all of the Proposals because the brokers do not have discretionary voting authority and have not received instructions from you as to how to vote on those Proposals (so-called “broker non-votes”) are considered “shares present” for purposes of determining whether a quorum exists. Broker non-votes with respect to each of the Proposals are not deemed to be “present”.
 
Voting Shares in Person that are Held Through Brokers.  If you are a “shareholder of record,” you may vote your shares in person at the special meeting. If you hold your shares in “street name,” you must obtain a legal proxy from your broker, banker, trustee or nominee, giving you the right to vote the shares at the special meeting.
 
Submitting a Proxy by Telephone or Through the Internet.  Delaware law permits submission of proxies by telephone or electronically through the Internet, instead of submitting proxies by mail on the enclosed proxy card. Thus, stockholders of record and many stockholders who hold their shares through a broker or bank will have the option to submit their proxies or voting instructions by telephone or electronically through the Internet. Please note that there are separate arrangements for using the telephone and the Internet depending on whether your shares are registered in Mobile Mini’s stock records in your name or in the name of a broker/bank/trust/nominee. If you hold your shares through a broker/bank/trust/nominee, your broker/bank/trust/nominee will provide you with materials and instructions for voting your shares.
 
Revocation of Proxies.  You may revoke your proxy by doing one of the following:
 
  •  by sending a written notice of revocation to the Secretary of Mobile Mini that is received by the Company prior to the special meeting, stating that you revoke your proxy;
 
  •  by signing a later-dated proxy card and submitting it so that it is received prior to the special meeting in accordance with the instructions included in the proxy card(s); or
 
  •  by attending the special meeting and voting your shares in person.
 
Required Stockholder Vote
 
In order to conduct business at the special meeting, a quorum must be present. The holders of a majority of the votes entitled to be cast at the special meeting, present in person or represented by proxy, constitute a quorum under Mobile Mini’s bylaws. Mobile Mini will treat shares of Mobile Mini’s common stock represented by a properly signed and returned proxy, including abstentions and broker non-votes, as present at the Mobile Mini special meeting for the purposes of determining the existence of a quorum.
 
With respect to any matter submitted to a vote of Mobile Mini stockholders, each holder of Mobile Mini common stock will be entitled to one vote, in person or by proxy, for each share of Mobile Mini common stock held in his, her or its name on the books of Mobile Mini on the record date.
 
Proposals 4 and 5 require the affirmative vote of a majority of those shares present in person or represented by proxy and entitled to vote thereon at the special meeting.
 
Proposals 1, 2, 3 and 6 require the affirmative vote of holders of at least a majority of our outstanding common stock.
 
All other actions considered at the meeting may be taken upon the the affirmative vote of a majority of those shares present in person or represented by proxy and entitled to vote thereon at the special meeting.
 
As of the record date, directors and executive officers of Mobile Mini and their affiliates as a group beneficially owned and were entitled to vote approximately [1,083,106] shares of Mobile Mini common stock, representing approximately [ • ]% of the votes entitled to be cast at the special meeting. All of the directors and executive officers of Mobile Mini who are entitled to vote at the special meeting have indicated that they intend to vote their


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shares of Mobile Mini common stock in favor of each of the Proposals, although such persons have not entered into agreements obligating them to do so.
 
Recommendations by the Board of Directors of Mobile Mini
 
The Board of Directors of Mobile Mini unanimously recommends that Mobile Mini stockholders vote FOR each of the Proposals.
 
The matters to be considered at the special meeting are of great importance to the stockholders of Mobile Mini. Accordingly, you are encouraged to read and carefully consider the information presented in this proxy statement, and to submit your proxy by telephone or mail in the enclosed postage-paid envelope.
 
Proxy Solicitation
 
Mobile Mini will pay the costs of soliciting proxies. Pursuant to the terms of the Merger Agreement, the fees and expenses associated with the filing, printing and mailing of this proxy statement will be borne by Mobile Mini. We have retained Morrow & Co., LLC to assist in the solicitation of proxies. We will pay Morrow & Co., LLC $7,500 plus out-of-pocket expenses for its assistance. Certain directors, officers or employees of Mobile Mini may solicit proxies by telephone, facsimile, email or personal contact. They will not be specifically compensated for doing so. The extent to which any proxy soliciting efforts will be necessary depends upon how promptly proxies are received. You should send in your proxy by mail without delay or vote by telephone. Mobile Mini also reimburses brokers and other custodians, nominees and fiduciaries for their expenses in sending these materials to you and getting your voting instructions. A more complete description of how to send your proxy is included on the proxy accompanying this proxy statement.
 
Other Business
 
Mobile Mini is not currently aware of any business other than the named Proposals to be acted upon at the special meeting. If, however, any other matters are properly brought before the meeting, or any adjournment or postponement thereof, the persons named in the enclosed form of proxy, and acting under that proxy, will have discretion to vote or act on those matters in accordance with their best judgment.
 
No Appraisal Rights
 
Under Delaware law and under our certificate of incorporation, holders of Mobile Mini common stock are not entitled to appraisal rights with respect to the matters to be considered at the special meeting.
 
Other Information
 
Representatives of Ernst & Young LLP are not expected to be present at the special meeting.


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PROPOSALS TO BE CONSIDERED AND VOTED UPON BY HOLDERS OF MOBILE
MINI COMMON STOCK AT THE SPECIAL MEETING
 
Proposal One
 
Approval of the Merger Agreement and the Merger
 
Mobile Mini is asking its stockholders to consider and vote upon a proposal to authorize and approve the Merger Agreement, pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. Immediately after the merger, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini.
 
Proposal Two
 
Approval of an Amendment to Mobile Mini’s Certificate of Incorporation
to increase the number of Authorized Shares
 
Mobile Mini is seeking the approval of holders of common stock for an amendment to Mobile Mini’s certificate of incorporation to increase the number of authorized shares of preferred stock, par value $0.01 per share, from 5,000,000 shares to 20,000,000 shares and a corresponding increase to Mobile Mini’s total number of authorized shares of capital stock from 100,000,000 shares to 115,000,000 shares. The authorized number of shares of common stock would remain unchanged at 95,000,000 shares.
 
The amendment is required under the terms of the Merger Agreement and is necessary to enable Mobile Mini to have enough shares of authorized preferred stock to issue shares of preferred stock in connection with the merger. Accordingly, if this proposal is not approved by stockholders at the special meeting, a condition to the closing of the merger will not be satisfied and the merger will not be consummated. If this proposal is approved by stockholders and the merger is consummated, Mobile Mini will have the ability to issue an additional 11,444,444 shares of preferred stock in the future.
 
Proposal Three
 
Approval of an Amendment to Mobile Mini’s Certificate of Incorporation
to authorize the Designation of Series A Convertible
Redeemable Participating Preferred Stock
 
Mobile Mini is seeking the approval of holders of common stock for an amendment to Mobile Mini’s certificate of incorporation to authorize the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock.
 
The amendment authorizing the designation of a series of preferred stock as Series A Convertible Redeemable Participating Preferred Stock is required under the terms of the Merger Agreement and is necessary to enable Mobile Mini to issue such shares of preferred stock in connection with the merger. Accordingly, if this proposal is not approved by stockholders at the special meeting, a condition to the closing of the merger will not be satisfied and the merger will not be consummated. The amendment, if approved by Mobile Mini’s stockholders, would authorize Mobile Mini to issue 8,555,556 shares of preferred stock.
 
Summary of the terms of the Series A Convertible Redeemable Participating Preferred Stock
 
The following summary is a summary only and is qualified, in all material respects, by the provisions of the Certificate of Designation which is included as Exhibit D to Annex A, and is incorporated by reference into this proxy statement. This summary describes the material provisions of the Series A Convertible Redeemable Preferred Stock and may not contain all of the information about the terms of the preferred stock that may be important to you in evaluating the Proposals described in this proxy statement.
 
Ranking.  The preferred stock will, with respect to dividend rights, rights upon a liquidity event, rights to any other distributions or payments with respect to capital stock, voting rights and all other rights and preferences, rank


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junior to each other class or series of capital stock of Mobile Mini other than (i) in all respects all classes or series of common stock existing or created after the date hereof, (ii) with respect to any other class or series of capital stock which by its terms ranks junior to the preferred stock, it shall rank senior to each such series of capital stock, (iii) with respect to dividends and voting rights, it shall rank pari passu with the common stock, and (iv) with respect to a distribution upon the occurrence of a liquidity event it shall rank senior to the common stock.
 
Dividends.  Holders of record of shares of preferred stock shall be entitled to receive when, as and if, declared by the Board of Directors of Mobile Mini, out of funds legally available therefor, cash dividends payable on shares of the preferred stock at the same time as cash dividends are paid on shares of common stock (and in the same manner and amount as if such shares of the preferred stock had been converted into shares of common stock at the time of such cash dividends).
 
Liquidation preference.  Each share of Series A Convertible Redeemable Participating Preferred Stock will have an original liquidation preference of $18.00, subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations and like occurrences. Upon the occurrence of a voluntary or involuntary filing of bankruptcy of Mobile Mini or any liquidation, dissolution or winding up of Mobile Mini, each holder of shares of preferred stock then outstanding shall be entitled to be paid out of the assets of Mobile Mini legally available for distribution to its stockholders, a per share amount (such amount referred to as the Series A Liquidation Preference) on such date equal to the greater of (i) the original liquidation preference plus all declared and unpaid dividends per each share of preferred stock and (ii) the amount such holder would be entitled to receive if each share of preferred stock held by it were converted into shares of common stock before any payment is made to the holders of common stock or any other class or series of capital stock ranking junior to the preferred stock.
 
Voting Rights.  Each holder of the preferred stock will be entitled to vote, voting together with the holders of common stock as a single class, on all matters on which holders of common stock are entitled to vote, on an as-converted basis.
 
Optional Conversion.  Each share of preferred stock will be convertible into such number of shares of Mobile Mini common stock as is determined by dividing the original liquidation preference by the conversion price, which shall initially be $18.00, subject to adjustment from time to time as provided in the certificate of designation.
 
Holder Optional Redemptions.  (a) At any time after the tenth anniversary of the issue date, at the written election of the holders of a majority of the then outstanding shares of the preferred stock (referred to as the Majority Holders), Mobile Mini shall redeem all of the shares of preferred stock then outstanding on the date specified by the Majority Holders for an amount per share equal to the Series A Liquidation Preference. If the funds of Mobile Mini legally available for the redemption of shares of preferred stock are insufficient to permit the payment of the amounts due to such holders, then the holders of preferred stock shall share in any legally available funds pro rata based on the number of shares of preferred stock held by each such holder. Until all required payments have been made, (i) Mobile Mini shall use commercially reasonable efforts to obtain the funds and/or make funds legally available as necessary to make the required remaining payments, (ii) the number of directors on the Board of Directors of Mobile Mini shall be increased by 1 and the Majority Holders shall have the right to appoint the 1 additional director and (iii) the amount of the required remaining payments shall accrue interest at a rate of 10% per annum, compounded quarterly, until the remaining payments are paid in full.
 
(b) If Mobile Mini enters into a binding agreement in respect of a sale of Mobile Mini (x) on or prior to June 22, 2008, (y) on or prior to the date that is 90 days after the issue date and the negotiations in connection with such sale commenced prior to the issue date, or (z) after the date which is 90 days after the issue date, and in any such case the per-share purchase price of the common stock in connection with such sale is less than $23.00 per share, then at the written election of the Majority Holders, Mobile Mini shall redeem all of the shares of preferred stock then outstanding at a price per share equal to (i) in the case of clauses (x) or (y) above, $21.60 per share, and (ii) in the case of clause (z) above, the original liquidation preference plus declared but unpaid dividends.
 
Corporation Optional Redemption.  Subject to the rights of the holders described in paragraph (b) above under “Holder Optional Redemptions,” Mobile Mini may redeem all of the shares of preferred stock then outstanding simultaneously with the consummation of a sale of Mobile Mini in which the per share purchase


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price of the common stock in connection with such sale is less than $23.00 per share for an amount per share equal to the original liquidation preference plus declared but unpaid dividends.
 
Mandatory Conversion.  The preferred stock will be mandatorily convertible into Mobile Mini common stock if (x) after the first anniversary of the issuance of the preferred stock, Mobile Mini’s common stock trades above $23.00 per share for a period of 30 consecutive trading days or (y) Mobile Mini enters into a binding agreement in respect of a sale of Mobile Mini in which the per-share purchase price of the common stock is less than $23.00 per share and the Majority Holders did not exercise the optional redemption described above.
 
Proposal Four
 
Approval of the Issuance of 8,555,556 Shares of Series A Convertible
Redeemable Participating Preferred Stock
 
Mobile Mini is seeking the approval of holders of common stock for the issuance of 8,555,556 shares of Series A Convertible Redeemable Participating Preferred Stock in connection with the merger.
 
These shares, convertible initially into approximately 8,555,556 million shares of Mobile Mini common stock, represent approximately 24.7%, at December 31, 2007, of our common stock outstanding before the completion of the merger. The issuance of the preferred stock in connection with the merger requires the approval of holders of Mobile Mini under NASDAQ Stock Market rules because the number of shares of common stock into which the preferred stock is convertible is in excess of 20% of the number of shares of common stock currently outstanding. Accordingly, if this proposal is not approved by stockholders at the special meeting, a condition to the closing of the merger will not be satisfied and the merger will not be consummated.
 
Proposal Five
 
Approval of Adjournments or Postponements of the Special Meeting
 
Mobile Mini is asking holders of common stock to approve adjournments or postponements of the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting in favor of the foregoing Proposals.
 
Approval of Proposal 5 is not a condition to the completion of the merger.
 
Proposal Six
 
Approval of an Amendment to Mobile Mini’s Certificate of Incorporation
to Authorize the Board of Directors of Mobile Mini to Determine Terms of Preferred Stock
 
Mobile Mini is seeking the approval of holders of common stock for an amendment to Mobile Mini’s certificate of incorporation to provide that authorized preferred stock may be issued in one or more classes or any series of any class, with such voting powers, designations, preferences and relative participating, optional or other rights, as well as any qualifications, limitations or restrictions, as shall be fixed by the Board of Directors of Mobile Mini from time to time.
 
The amendment will provide Mobile Mini with increased financial flexibility in meeting future capital requirements, as it will allow preferred stock to be available with such features as determined by the Board of Directors of Mobile Mini for any proper corporate purpose without further stockholder approval. It is anticipated that such purposes may include the issuance of preferred stock for cash as a means of obtaining capital for use by Mobile Mini, or issuance as part or all of the consideration required to be paid by Mobile Mini for acquisitions of other businesses or assets. This amendment is not being proposed as a means of preventing or dissuading a hostile or coercive change in control or takeover of Mobile Mini. However, the preferred stock could be used for such a purpose. If preferred stock were to be issued (i) in connection with a stockholder rights plan, also known as a “poison pill” plan, or (ii) to purchasers supporting the Board of Directors of Mobile Mini in resisting a specific takeover proposal, such issuance could have the effect of delaying or preventing a change of control of Mobile Mini by increasing the number of outstanding shares entitled to vote and by increasing the number of votes required to approve a change of control of Mobile Mini.
 
Approval of Proposal 6 is not a condition to the completion of the merger.


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THE MERGER
 
Background of the Merger
 
As a participant in the portable storage industry, the management of Mobile Mini is generally familiar with Mobile Storage Group’s business and has met and meets from time to time with other portable storage companies (including Mobile Storage Group) at industry conferences and similar events. On an ongoing basis, Mobile Mini’s senior management reviews Mobile Mini’s business strategy and evaluates options for achieving Mobile Mini’s long-term strategic goals and enhancing stockholder value. In connection with these reviews, Mobile Mini’s management, periodically, has evaluated potential acquisitions that would further Mobile Mini’s strategic objectives.
 
Mobile Mini has had prior dialogue with Mobile Storage Group with respect to a potential business combination. In 2005, prior to the acquisition of Mobile Storage Group by WCAS, Mobile Mini’s management met with and had preliminary discussions with Mobile Storage Group’s owners and management to determine Mobile Mini’s potential interest in exploring a business combination with Mobile Storage Group. These discussions between Mobile Mini and Mobile Storage Group did not proceed beyond the stage of preliminary meetings and dialogue on this topic.
 
On October 30, 2007, at the request of WCAS, the majority stockholder of Mobile Storage Group, Mobile Mini’s senior management and representatives of WCAS met in Chandler, Arizona. During this initial meeting, WCAS’s representatives and Mobile Mini’s senior management discussed in general terms the respective businesses of Mobile Storage Group and Mobile Mini and prospects for the industry. During the course of these discussions, WCAS’s representatives and Mobile Mini’s senior management had the opportunity to discuss possible business relationships between the two companies, including a possible business combination, and exchanged preliminary views regarding the potential strategic fit of the two organizations and the complementary nature of their service and product offerings. In addition, WCAS’s representatives and Mobile Mini’s senior management had high level discussions on the potential for synergies that might be derived from a business combination. Terms of a potential combination of Mobile Mini and Mobile Storage Group were not discussed at this meeting. Both parties recognized the potential strategic merits of a business combination and it was agreed that, as a follow up to this meeting, WCAS would provide Mobile Mini with an outline of a transaction structure to effect a business combination.
 
Following this initial discussion with WCAS, Mobile Mini contacted Oppenheimer, Mobile Mini’s financial advisor, to request Oppenheimer’s assistance with Mobile Mini’s review of the forthcoming proposal from WCAS. Additionally, Mobile Mini’s senior management discussed with the Board of Directors of Mobile Mini the meeting with WCAS and the prospect of a potential business combination with Mobile Storage Group.
 
On November 16, 2007, Mobile Mini received a preliminary proposal for discussion purposes from Mobile Storage Group’s financial advisor, Lehman Brothers, Inc. (hereinafter referred to as Lehman), and WCAS, which included potential transaction terms and a potential structure for a prospective business combination. According to the terms of such preliminary proposal, Mobile Storage Group would merge into Mobile Mini in a transaction valued at approximately $750 million. Under the terms of such proposal, Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of shares of Mobile Mini convertible preferred stock having a face value of $222.9 million, a conversion price of $19.50 per share and a 5% payable in-kind dividend and the assumption by Mobile Mini of the outstanding debt of Mobile Storage Group, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 24%, assuming conversion of Mobile Mini preferred stock. At the time of this initial proposal, on November 16, 2007, Mobile Mini’s stock price closed at $18.40 per share.
 
During the four weeks following this initial proposal, Mobile Mini and Mobile Storage Group exchanged revised proposals focusing on transaction value and deal structure regarding the potential combination of Mobile Mini and Mobile Storage Group. During this period, Mobile Mini enlisted Deutsche Bank Securities Inc. (hereinafter DB Securities) to act as a financial advisor to Mobile Mini in addition to Oppenheimer.


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On November 29, 2007, Mobile Mini provided a counterproposal to WCAS and Mobile Storage Group. According to the terms of such counterproposal, Mobile Storage Group would merge into Mobile Mini in a transaction valued at approximately $715 million and Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of a combination of 5.9 million shares of Mobile Mini common stock and $75 million in cash and the assumption by Mobile Mini of approximately $535 million of outstanding debt of Mobile Storage Group (hereinafter referred to as the “MSG Debt”), which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 15%.
 
On December 2, 2007, Mobile Storage Group submitted a further revised proposal providing for a transaction valued at approximately $735 million pursuant to which Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for a consideration consisting of approximately 10.5 million shares of Mobile Mini common stock valued at $19.00 per share and the assumption by Mobile Mini of the MSG Debt, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 23%.
 
On December 4, 2007, Mobile Mini submitted a further revised proposal, providing for a transaction valued at approximately $685 million in which Mobile Mini removed the $75 million cash component of the merger consideration from its prior offer and proposed that Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of 7.9 million shares of Mobile Mini common stock valued at $19.00 per share and the assumption by Mobile Mini of the MSG Debt, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 18%.
 
After the discussions with WCAS had commenced, Mobile Mini’s senior management regularly apprised the Board of Directors of Mobile Mini of its discussions with WCAS and Mobile Storage Group, reviewing the potential strategic rationale for the combination and discussing the terms and overall structure of the proposed transaction.
 
On December 6, 2007, Mobile Mini and Mobile Storage Group discussed terms and structure for a potential business combination pursuant to which Mobile Storage Group would merge into Mobile Mini in a transaction valued at $715 million. Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for consideration consisting of a combination of 8.5 million shares of Mobile Mini common stock valued at $20.00 per share and $12.5 million in cash and the assumption by Mobile Mini of the MSG Debt, which would result in Mobile Storage Group stockholders’ fully diluted ownership in Mobile Mini of approximately 20%. On December 6, 2007, Mobile Mini’s stock price closed at $20.49 per share.
 
On December 12, 2007, Mobile Mini, Mobile Storage Group and WCAS met to discuss an agenda for management presentations and due diligence meetings scheduled for December 19 and 20, 2007 in Phoenix, Arizona.
 
On December 14, 2007, the companies finalized and memorialized in a non-binding term sheet the terms discussed on December 6, 2007 and Mobile Mini, Mobile Storage Group and WCAS executed a mutual confidentiality agreement.
 
On December 17, 2007, White & Case LLP, outside counsel to Mobile Mini, and Kirkland & Ellis LLP, outside counsel to Mobile Storage Group, together with Oppenheimer, DB Securities and Lehman, met telephonically to discuss the scope of a proposed merger agreement.
 
On December 19 and 20, 2007, Mobile Mini, Mobile Storage Group and WCAS met in Phoenix to discuss potential synergies and commence due diligence efforts. The companies’ financial advisors were also present at this meeting.
 
On December 26, 2007, extensive and detailed financial, operational and legal due diligence was commenced by each of Mobile Mini and Mobile Storage Group regarding the other. This due diligence continued through the execution of the definitive Merger Agreement on February 22, 2008.
 
On December 28, 2007, White & Case LLP, on behalf of Mobile Mini, distributed an initial draft of the Merger Agreement to Mobile Storage Group and Kirkland & Ellis LLP.


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On January 3, 2008, Mobile Mini, Mobile Storage Group and WCAS met in Phoenix to discuss Mobile Mini’s business and operations for due diligence purposes. The companies’ financial advisors also participated in this meeting.
 
On January 8, 2008, WCAS and Mobile Storage Group provided an issues list on the draft Merger Agreement. WCAS and Mobile Storage Group proposed to make reciprocal a number of representations and warranties and covenants of Mobile Storage Group in the draft Merger Agreement. In addition, WCAS and Mobile Storage Group proposed revising the Mobile Mini common stock component of the merger consideration, which as originally agreed to provided for a fixed number of shares, and requested a “purchase price protection” mechanism, or collar, that would allow for an increase in the number of shares of Mobile Mini’s common stock to be received by the stockholders of Mobile Storage Group in the event Mobile Mini’s stock did not trade at a price of $19.00 or higher. On January 8, 2008, at the time of this additional request by Mobile Storage Group, Mobile Mini common stock price closed at $16.31 per share, significantly below the Mobile Mini common stock closing price of $20.49 per share on December 6, 2007.
 
On January 8, 2008, White & Case LLP and Kirkland & Ellis LLP discussed certain provisions of the draft Merger Agreement.
 
On January 10, 2008, WCAS, Mobile Storage Group, Mobile Mini and their respective financial advisors began conversations regarding alternative structures for the transaction in light of the decline in Mobile Mini’s stock price since December 6, 2007. In the course of these discussions, Mobile Mini rejected any “purchase price protection” mechanism and WCAS proposed to address the issue by changing the common stock portion of the merger consideration to a convertible preferred security.
 
On January 14, 2008, Mobile Mini provided a revised proposal to Mobile Storage Group and WCAS. The proposal rejected the convertible preferred security and instead suggested adding “contingent value rights” or “CVRs” as a component to the merger consideration for Mobile Storage Group stockholders to address the decline in transaction value caused by Mobile Mini’s stock price decline.
 
On January 14, 2008, White & Case LLP and Kirkland & Ellis LLP discussed telephonically certain provisions of the draft Merger Agreement.
 
On January 15, 2008, Mobile Mini’s senior management, with the assistance of Mobile Mini’s legal and financial advisors, updated the Board of Directors of Mobile Mini on the ongoing discussion regarding deal structure and proposed merger consideration, including the “purchase price protection” mechanism requested by WCAS and Mobile Mini’s counterproposal of issuing CVRs. The Board of Directors of Mobile Mini also received an update on Mobile Mini’s ongoing due diligence on Mobile Storage Group and outstanding issues on the draft Merger Agreement.
 
For the following two weeks, Mobile Mini, WCAS, Mobile Storage Group and their respective financial advisors held various telephone conversations and discussions regarding potential alternatives to the merger consideration package and the transaction structure for the business combination of the two companies.
 
On January 29, 2008, Mobile Storage Group and WCAS provided a revised proposal. Under the terms of the revised proposal, Mobile Storage Group would merge into Mobile Mini and Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group for a revised consideration consisting of a combination of $12.5 million in cash and shares of convertible preferred stock of Mobile Mini with an aggregate liquidation preference of $140 million, a conversion price of $18.00 per share, and no dividend, and the assumption by Mobile Mini of the MSG Debt, which would result in fully diluted ownership of the Mobile Storage Group stockholders in Mobile Mini of approximately 18.2%, assuming conversion of Mobile Mini’s preferred stock. In addition, the revised proposal from Mobile Storage Group contemplated the issuance to Mobile Storage Group stockholders of five million Mobile Mini common stock options in three tranches of options with strike prices of $20.00, $25.00 and $30.00.
 
On February 1, 2008, Mobile Mini submitted a counterproposal to the Mobile Storage Group and WCAS January 29, 2008 proposal, pursuant to which Mobile Storage Group would merge into Mobile Mini and Mobile Mini would acquire all of the outstanding shares of the common stock of Mobile Storage Group in a transaction


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valued at approximately $700.5 million, for consideration consisting of a combination of $12.5 million in cash, Mobile Mini convertible preferred shares with a liquidation preference of $153 million, a conversion price of $18.00 per share and no dividend, and 8.5 million CVRs valued at a maximum of $17 million, and the assumption by Mobile Mini of the MSG Debt, which would result in fully diluted ownership of the Mobile Storage Group stockholders in Mobile Mini of approximately 19.7%, assuming conversion of Mobile Mini’s preferred stock. For the next two days, Mobile Mini and Mobile Storage Group continued negotiating the form and amount of the merger consideration and material contract terms.
 
On February 3, 2008, Mobile Mini and Mobile Storage Group discussed a revised deal structure with a transaction value of $701.5 million and merger consideration consisting of $12.5 million in cash and Mobile Mini convertible preferred shares with a liquidation preference of $154 million, a conversion price of $18.00 per share and no dividend, and the assumption by Mobile Mini of the MSG Debt, which would result in fully diluted ownership of the Mobile Storage Group stockholders in Mobile Mini of approximately 19.1%, assuming conversion of Mobile Mini preferred stock.
 
From February 3, 2008 through February 22, 2008, Mobile Mini, Mobile Storage Group and their respective advisors engaged in numerous conference calls and discussions on the terms of the Merger Agreement. To reflect the progress of these discussions and negotiations, on February 10, 2008, White & Case LLP, on behalf of Mobile Mini, circulated a revised Merger Agreement to Kirkland & Ellis LLP, WCAS and Mobile Storage Group. On February 19, 2008, Kirkland & Ellis LLP, on behalf of Mobile Storage Group, circulated a further revised Merger Agreement to White & Case LLP and Mobile Mini.
 
During the week of February 11, 2008, White & Case LLP, on behalf of Mobile Mini, circulated initial drafts of the form joinder agreement, the forms of stockholders agreement, escrow agreement and certificate of designation for Mobile Mini’s preferred stock, all of which were negotiated by Mobile Mini and Mobile Storage Group and their respective legal advisors in the following days until the execution of the Merger Agreement on February 22, 2008.
 
On February 11, 2008, the Board of Directors of Mobile Mini reviewed and discussed the transaction with Mobile Mini’s senior management and advisors.
 
On February 20, 2008, Mobile Mini’s senior management and advisors updated the Board of Directors of Mobile Mini on the status of the final negotiations and discussions with Mobile Storage Group.
 
On February 21, 2008, the Board of Directors of Mobile Mini met and was presented with the proposed Merger Agreement and ancillary agreements for approval. At that meeting, Mobile Mini’s senior management and legal and financial advisors reviewed with the Board of Directors of Mobile Mini the transaction and related matters. During this meeting, Oppenheimer reviewed with the Board of Directors of Mobile Mini its financial analysis of the aggregate merger consideration to be paid in the merger by Mobile Mini and rendered to the Board of Directors of Mobile Mini an oral opinion, which was confirmed by delivery of a written opinion dated February 21, 2008, to the effect that, as of that date and based on and subject to the matters described in the opinion, the aggregate merger consideration to be paid in the merger by Mobile Mini was fair, from a financial point of view, to Mobile Mini. After deliberation, the Board of Directors of Mobile Mini unanimously determined that the transactions contemplated in the Merger Agreement and in the ancillary agreements, are advisable, fair to and in the best interest of Mobile Mini and its stockholders. The Board of Directors of Mobile Mini then unanimously approved the Merger Agreement and the ancillary agreements and resolved to recommend to Mobile Mini stockholders the approval and adoption of the Merger Agreement and the ancillary agreements.
 
On February 22, 2008, Mobile Mini and Mobile Storage Group executed the Merger Agreement and Mobile Mini and certain stockholders of Mobile Storage Group executed the joinder agreement. Prior to the open of the market on February 22, 2008, Mobile Mini issued a press release announcing the Merger Agreement entered into with Mobile Storage Group.
 
Reasons for the Merger; Recommendation of the Board of Directors of Mobile Mini
 
In evaluating the merger, the Board of Directors of Mobile Mini consulted with our senior management and our legal and financial advisors. In reaching its decision to approve and adopt the Merger Agreement and recommend


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that our stockholders vote “FOR” approval and adoption of the Merger Agreement and the merger, the Board of Directors of Mobile Mini considered the following material factors:
 
  •  the merger will establish the combined company as a leading global provider of portable storage solutions in the US and the UK;
 
  •  our geographic footprint will be significantly expanded and we will be positioned to cover most major markets for portable storage in both the US and the UK;
 
  •  our product and service offerings will be broadened and our ability to service an expanded customer base will be significantly expanded;
 
  •  our revenue growth potential will be improved through implementing our growth model into newly acquired Mobile Storage Group branches;
 
  •  the merger is expected to generate cost synergies of at least $25 million on an annualized basis, which are expected to be fully realized by the end of fiscal 2009, as a result of the significant overlap in corporate functions and branch infrastructure;
 
  •  the merger is expected to be slightly accretive to earnings in 2008 (excluding merger-related expenses), and should generate substantial EPS accretion in 2009, including the benefit of expected synergies;
 
  •  the merger has been structured to maintain a strong balance sheet with sufficient liquidity; and
 
  •  Oppenheimer’s opinion, dated February 21, 2008, to the Board of Directors of Mobile Mini as to the fairness, from a financial point of view and as of the date of the opinion, to Mobile Mini of the aggregate consideration to be paid in the merger by Mobile Mini, as more fully described below under the caption “Opinion of Mobile Mini’s Financial Advisor.”
 
The Board of Directors of Mobile Mini also considered potential risks and costs relating to the merger, including:
 
  •  the risks and costs to us if the merger is not completed, including the diversion of management and employee attention, the loss of business opportunities that might otherwise have been pursued, potential employee attrition and the potential effect on business and customer relationships;
 
  •  the risk that holders of Mobile Mini common stock may fail to approve the merger and the issuance of the preferred stock;
 
  •  the risk that we may fail to realize the anticipated benefits of the merger;
 
  •  the risk that the integration process could adversely impact our ongoing operations and costs the of integration, including costs associated with the elimination of overlap in corporate functions and branch infrastructure;
 
  •  the risks and costs associated with the additional indebtedness incurred in connection with the merger and the adverse impact such additional indebtedness could have on our ability to operate our business; and
 
  •  the fees and expenses associated with completing the merger.
 
The foregoing discussion addresses certain material information and factors considered by the Board of Directors of Mobile Mini in its consideration of the merger, including factors that support the merger as well as those that may weigh against it. In view of the variety of factors and the quality and amount of information considered, the Board of Directors of Mobile Mini did not find it practicable to, and did not make specific assessments of, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination. In addition, the Board of Directors of Mobile Mini did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate determination. The determination to approve the merger was made after consideration of all of the factors in the aggregate. In addition, individual members of the Board of Directors of Mobile Mini may have given different weights to different factors.


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The actual benefits from the merger, costs of integration and ability to achieve expected synergies could differ materially from the estimates and expectations discussed above. Accordingly, the potential benefits described above or the potential benefits described in this proxy statement may not be realized.
 
Opinion of Mobile Mini’s Financial Advisor
 
Mobile Mini has engaged Oppenheimer as its financial advisor in connection with the merger. In connection with this engagement, Mobile Mini requested that Oppenheimer evaluate the fairness, from a financial point of view, to Mobile Mini of the aggregate consideration to be paid in the merger by Mobile Mini. On February 21, 2008, at a telephonic meeting of the Board of Directors of Mobile Mini held to evaluate the merger, Oppenheimer rendered to the Board of Directors of Mobile Mini an oral opinion, which was confirmed by delivery of a written opinion, dated February 21, 2008, to the effect that, as of that date and based on and subject to the matters described in its opinion, the aggregate consideration to be paid in the merger by Mobile Mini was fair, from a financial point of view, to Mobile Mini.
 
The full text of Oppenheimer’s written opinion, dated February 21, 2008, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached to this proxy statement as Annex B. Oppenheimer’s opinion was provided to the Board of Directors of Mobile Mini in connection with its evaluation of the aggregate consideration from a financial point of view to Mobile Mini. Oppenheimer’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matters relating to the merger. The summary of Oppenheimer’s opinion described below is qualified in its entirety by reference to the full text of its opinion.
 
In arriving at its opinion, Oppenheimer:
 
  •  reviewed a draft dated February 20, 2008 of the Merger Agreement and certain related documents;
 
  •  reviewed audited financial statements of Mobile Services Group, Inc., referred to in this section as Mobile Services, for fiscal years ended December 31, 2006, December 31, 2005 and December 31, 2004, and draft unaudited financial statements of Mobile Services and Mobile Storage Group for fiscal year ended December 31, 2007 prepared by Mobile Storage Group’s management (as adjusted by Mobile Mini’s management in the case of the draft unaudited financial statements of Mobile Services);
 
  •  held discussions with the senior managements of Mobile Mini and Mobile Storage Group with respect to the businesses and prospects of Mobile Mini and Mobile Storage Group;
 
  •  reviewed estimates prepared by Mobile Mini’s management as to the potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger;
 
  •  reviewed and analyzed certain publicly available financial data for companies that Oppenheimer deemed relevant in evaluating Mobile Storage Group;
 
  •  reviewed and analyzed certain publicly available information for transactions that Oppenheimer deemed relevant in evaluating the merger;
 
  •  reviewed the financial terms of Mobile Mini preferred stock, including the conversion and redemption features of Mobile Mini preferred stock;
 
  •  reviewed historical market prices of Mobile Mini common stock;
 
  •  reviewed certain potential pro forma financial effects of the merger on Mobile Mini based on financial forecasts and estimates relating to Mobile Mini and Mobile Storage Group on a combined basis for calendar years 2008 through 2010, including estimates as to the potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger, prepared by Mobile Mini’s management;
 
  •  reviewed other public information concerning Mobile Mini and Mobile Storage Group; and
 
  •  performed such other analyses, reviewed such other information and considered such other factors as Oppenheimer deemed appropriate.


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In rendering its opinion, Oppenheimer relied upon and assumed, without independent verification or investigation, the accuracy and completeness of all of the financial and other information provided to or discussed with Oppenheimer by Mobile Mini, Mobile Storage Group and their respective employees, representatives and affiliates or otherwise reviewed by Oppenheimer. Mobile Mini was not provided with financial forecasts for Mobile Services or Mobile Storage Group prepared by the management of Mobile Storage Group beyond calendar year 2008. In addition, based on the assessments of Mobile Mini’s management as to the likelihood of achieving the financial results reflected in the financial forecasts provided by Mobile Storage Group’s management for calendar year 2008, Oppenheimer was directed by Mobile Mini’s management not to rely upon those financial forecasts for purposes of its analyses, and further was advised by Mobile Mini’s management that financial forecasts for Mobile Services or Mobile Storage Group on a standalone basis were not prepared by Mobile Mini’s management. Accordingly, with Mobile Mini’s consent, Oppenheimer did not undertake an analysis of the financial performance of Mobile Storage Group on a standalone basis beyond calendar year 2007. With respect to the draft unaudited financial statements of Mobile Services and Mobile Storage Group for fiscal year ended December 31, 2007, prepared by Mobile Storage Group’s management (as adjusted by Mobile Mini’s management in the case of the draft unaudited financial statements of Mobile Services), Oppenheimer was advised and, at Mobile Mini’s direction, assumed, without independent verification or investigation, that the financial statements (including the adjustments) were reasonably prepared on bases reflecting the best available information, estimates and judgments of the managements of Mobile Storage Group and Mobile Mini, as the case may be, and further assumed that the draft unaudited financial statements of Mobile Services and Mobile Storage Group for fiscal year ended December 31, 2007, when completed, would not vary materially from the unaudited financial statements for such fiscal year. With respect to the financial forecasts and estimates relating to Mobile Mini and Mobile Storage Group on a combined basis utilized by Oppenheimer in evaluating certain potential pro forma financial effects of the merger on Mobile Mini (including estimates prepared by Mobile Mini’s management as to the potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger), Oppenheimer assumed, at Mobile Mini’s direction, without independent verification or investigation, that such forecasts and estimates were reasonably prepared on bases reflecting the best available information, estimates and judgments of Mobile Mini’s management as to the future financial condition and operating results of the combined company and such synergies and strategic benefits. Oppenheimer relied, at Mobile Mini’s direction, without independent verification or investigation, on the assessments of Mobile Mini’s management as to the ability of Mobile Mini to integrate the businesses of Mobile Mini and Mobile Storage Group. Oppenheimer assumed, with Mobile Mini’s consent, that the merger would be treated as a reorganization for federal income tax purposes. Representatives of Mobile Mini advised Oppenheimer, and Oppenheimer therefore also assumed, that the final terms of the Merger Agreement would not vary materially from those set forth in the draft reviewed by Oppenheimer. Oppenheimer further assumed, with Mobile Mini’s consent, that the merger would be consummated in accordance with its terms without waiver, modification or amendment of any material term, condition or agreement and in compliance with all applicable laws and other requirements and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no delay, limitation, restriction or condition would be imposed, that would have an adverse effect on Mobile Mini, Mobile Storage Group or the merger (including the contemplated benefits to Mobile Mini of the merger). Oppenheimer neither made nor obtained any independent evaluations or appraisals of the assets or liabilities, contingent or otherwise, of Mobile Mini or Mobile Storage Group.
 
Oppenheimer did not express any opinion as to the underlying valuation, future performance or long-term viability of Mobile Mini or Mobile Storage Group, the actual value of Mobile Mini preferred stock (or the shares of Mobile Mini common stock into which shares of Mobile Mini preferred stock are convertible) when issued or the prices at which Mobile Mini preferred stock or Mobile Mini common stock would trade or otherwise be transferable at any time. Oppenheimer expressed no view as to, and its opinion did not address, any terms or other aspects or implications of the merger (other than the aggregate consideration to the extent expressly specified in its opinion) or any aspect or implication of any other agreement, arrangement or understanding entered into in connection with the merger or otherwise, including, without limitation, the form or structure of the merger or the aggregate consideration, any adjustments to the aggregate consideration or the terms of Mobile Mini preferred stock. In addition, Oppenheimer expressed no view as to, and its opinion did not address, the fairness of the amount or nature of, or any other aspect relating to, the compensation to be received by any individual officers, directors or employees of any parties to the merger, or any class of such persons, relative to the aggregate consideration. Oppenheimer also


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expressed no view as to, and its opinion did not address, the underlying business decision of Mobile Mini to effect the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for Mobile Mini or the effect of any other transaction in which Mobile Mini might engage. Oppenheimer’s opinion was necessarily based on the information available to it and general economic, financial and stock market conditions and circumstances as they existed and could be evaluated by Oppenheimer on the date of its opinion. Although subsequent developments may affect its opinion, Oppenheimer does not have any obligation to update, revise or reaffirm its opinion.
 
This summary is not a complete description of Oppenheimer’s opinion or the financial analyses performed and factors considered by Oppenheimer in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. Oppenheimer arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion. Accordingly, Oppenheimer believes that its analyses and this summary must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Oppenheimer’s analyses and opinion.
 
In performing its analyses, Oppenheimer considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of Mobile Mini and Mobile Storage Group. No company, business or transaction used in the analyses is identical or directly comparable to Mobile Storage Group or the merger, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed.
 
The forecasts and estimates contained in Oppenheimer’s analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than those suggested by its analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, the forecasts and estimates used in, and the results derived from, Oppenheimer’s analyses are inherently subject to substantial uncertainty.
 
The type and amount of consideration payable in the merger were determined through negotiation between Mobile Mini and Mobile Storage Group, and the decision to enter into the transaction was solely that of the Board of Directors of Mobile Mini. Oppenheimer’s opinion and financial presentation were only one of many factors considered by the Board of Directors of Mobile Mini in its evaluation of the merger and should not be viewed as determinative of the views of the Board of Directors of Mobile Mini or management with respect to the merger or the aggregate consideration.
 
The following is a summary of the material financial analyses reviewed with the Board of Directors of Mobile Mini in connection with Oppenheimer’s opinion dated February 21, 2008. The financial analyses summarized below include information presented in tabular format. In order to fully understand Oppenheimer’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Oppenheimer’s financial analyses. For purposes of the “Selected Companies Analysis” and “Selected Precedent Transactions Analysis” summarized below, the “illustrative market value of the aggregate consideration” refers to an illustrative value of the aggregate consideration payable by Mobile Mini in the merger, assuming no purchase price adjustments, of $166.5 million based on the sum of the following:
 
  •  the aggregate cash consideration payable by Mobile Mini in the merger of $12.5 million; and


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  •  an illustrative market value of the shares of Mobile Mini preferred stock issuable in the merger based on, among other things, the $154.0 million aggregate liquidation preference of those shares, the estimated yield to maturity of a hypothetical 10-year, zero coupon debt instrument of Mobile Mini and the estimated option value of the conversion feature of Mobile Mini preferred stock taking into account the historical trading price volatility of Mobile Mini common stock.
 
References below to “adjusted” financial data of Mobile Storage Group relate to financial data of Mobile Storage Group for calendar year 2007 utilized in Oppenheimer’s financial analyses based on draft unaudited financial statements prepared by Mobile Storage Group’s management, as adjusted by Mobile Mini’s management for one-time professional fees and the pro forma full-year impact of acquisitions effected by Mobile Storage Group in 2007 and January 2008, certain operating improvements experienced by Mobile Storage Group in the second half of 2007 and certain accounting adjustments.
 
Selected Companies Analysis
 
Oppenheimer reviewed financial and stock market information for the following five selected publicly held companies in the rental services industry, with particular focus on Mobile Mini and McGrath RentCorp, both of which engage in specialty rental services:
 
     
Specialty Rental Services Companies
 
Other Equipment Rental Companies
 
•   Mobile Mini
  •   H & E Equipment Services, Inc.
•   McGrath RentCorp
  •   RSC Holdings Inc.
   
•   United Rentals, Inc.
 
Oppenheimer reviewed, among other things, enterprise values of the selected companies, calculated as fully-diluted market value based on closing stock prices on February 20, 2008, plus debt, less cash, as multiples of latest 12 months (as of September 30, 2007) earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, and earnings before interest and taxes, referred to as EBIT. Financial data for the selected companies were based on public filings and other publicly available information.
 
Oppenheimer then applied to each of Mobile Storage Group’s calendar year 2007 adjusted EBITDA and adjusted EBIT a selected range of multiples derived, respectively, from Mobile Mini’s latest 12 months and five-year average historical latest 12 months EBITDA multiple and from McGrath RentCorp’s latest 12 months and five-year historical average latest 12 months EBIT multiple. This analysis indicated the following implied equity reference range for Mobile Storage Group, as compared to the illustrative market value of the aggregate consideration:
 
     
Implied Equity Reference Range
  Illustrative Market Value
for Mobile Storage Group
 
of Aggregate Consideration
 
$28.8 million — $234.0 million
  $146.5 million
 
Oppenheimer also applied Mobile Mini’s latest 12 months EBITDA multiple and McGrath RentCorp’s latest 12 months EBIT multiple to Mobile Storage Group’s calendar year 2007 adjusted EBITDA and adjusted EBIT, respectively, in each case after giving effect to potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger. This analysis indicated the following implied equity reference range for Mobile Storage Group, as compared to the illustrative market value of the aggregate consideration:
 
     
Implied Equity Reference Range
  Illustrative Market Value
for Mobile Storage Group
 
of Aggregate Consideration
 
$210.9 million — $246.7 million
  $146.5 million


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Selected Precedent Transactions Analysis
 
Oppenheimer reviewed, to the extent publicly available, transaction values in the following seven selected transactions involving companies in the rental services industry:
 
             
Announcement Date
 
Transaction Value
 
Acquiror
 
Target
 
• 11/2007
 
• $200.0 million
 
• First Atlantic Capital, Ltd.
 
• Sprint Industrial Holdings LLC
• 10/2007
 
• $2,304.6 million
 
• Ristretto Group S.a.r.l.
 
• Williams Scotsman International, Inc.
• 09/2007
 
• $107.7 million
 
• General Finance Corporation
 
• Royal Wolf Trading Australia Pty Ltd
• 04/2007
 
• Not Publicly Available
 
• Resun Corporation
 
• Transport International Pool, Inc. (d/b/a GE Modular Space)
• 07/2006
 
• $605.0 million
 
• WCAS
 
• Mobile Storage Group, Inc.
• 03/2006
 
• $49.9 million
 
• Mobile Mini, Inc.
 
• Royal Wolf Group
• 10/2005
 
• $510.0 million
 
• Lightyear Capital
 
• Baker Tanks, Inc.
 
Oppenheimer reviewed transaction values in the selected transactions, calculated as the equity value implied for the target company based on the consideration payable in the selected transaction, plus debt, less cash, as multiples of latest 12 months EBITDA and EBIT. Financial data for the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. Oppenheimer then applied to Mobile Storage Group’s calendar year 2007 adjusted EBITDA and adjusted EBIT a selected range of latest 12 months EBITDA and EBIT multiples derived from those selected transactions having transaction values of $150 million or more for which such multiples were publicly available, namely the Ristretto Group S.a.r.l./Williams Scotsman International, Inc. and WCAS/Mobile Storage Group, Inc. transactions. This analysis indicated the following implied equity reference range for Mobile Storage Group, as compared to the illustrative market value of the aggregate consideration:
 
     
Implied Equity Reference Range
  Illustrative Market Value
for Mobile Storage Group
 
of Aggregate Consideration
 
$306.2 million — $323.7 million
  $146.5 million
 
Accretion/Dilution Analysis
 
Oppenheimer reviewed the potential pro forma effect of the merger on Mobile Mini’s calendar years 2008 and 2009 estimated earnings per share, referred to as EPS, in each case after giving effect to potential synergies and strategic benefits anticipated by Mobile Mini’s management to result from the merger and before giving effect to one-time merger related expenses. Estimated financial data of the combined company were based on internal estimates of Mobile Mini’s management. Based on an assumed merger closing date of March 31, 2008, this analysis indicated that the merger could be accretive to Mobile Mini’s calendar years 2008 and 2009 estimated EPS. Actual results may vary from projected results and the variations may be material.
 
Miscellaneous
 
Mobile Mini has agreed to pay Oppenheimer for its financial advisory services in connection with the merger an aggregate fee of approximately $4.5 million, a portion of which was payable upon delivery of its opinion and a significant portion of which is contingent upon consummation of the merger. Mobile Mini also has agreed to reimburse Oppenheimer for its reasonable expenses, including reasonable fees and expenses of its legal counsel, and to indemnify Oppenheimer and related parties against liabilities, including liabilities under the federal securities laws, relating to, or arising out of, its engagement. In addition, the assignor of certain investment banking assets of Oppenheimer in the past performed investment banking and other services for Mobile Mini unrelated to the merger, for which services such assignor received compensation, including having acted as joint


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bookrunner for an offering of senior notes of Mobile Mini in May 2007 and as joint bookrunner for an offering of Mobile Mini common stock in March 2006. In the ordinary course of business, Oppenheimer and its affiliates may actively trade the securities of Mobile Mini and debt securities of Mobile Services for Oppenheimer’s and its affiliates’ own accounts and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.
 
The issuance of Oppenheimer’s opinion was approved by an authorized committee of Oppenheimer. Mobile Mini selected Oppenheimer as its financial advisor based on Oppenheimer’s reputation and experience. Oppenheimer is a nationally recognized investment banking firm and, as a part of its investment banking business, is regularly engaged in valuations of businesses and securities in connection with acquisitions and mergers, underwritings, secondary distributions of securities, private placements and valuations for other purposes.
 
The Board of Directors of Mobile Mini Following the Merger
 
As required by the stockholders agreement, upon consummation of the merger, Mobile Mini will expand the size of the Board of Directors of Mobile Mini to 8 from 6 and will appoint 2 directors designated by WCAS, to fill the vacancies.
 
WCAS has indicated that it will designate Michael E. Donovan and Sanjay Swani to serve as directors.
 
Michael E. Donovan previously served as a member of the Mobile Storage Group, Inc. Board of Directors since August 2006. Mr. Donovan joined WCAS, in 2001 and is currently a principal. Prior to joining WCAS, Mr. Donovan worked at Windward Capital Partners and the investment banking division of Merrill Lynch. Mr. Donovan currently serves on the Board of Directors of several privately-held companies, including Ozburn-Hessey Logistics Inc. and United Surgical Partners International Inc. Mr. Donovan graduated with a B.A. from Yale University in 1998.
 
Sanjay Swani previously served as a member of the Mobile Storage Group, Inc. Board of Directors since August 2006. Mr. Swani is a general partner of WCAS. Mr. Swani joined WCAS as a vice president in 1999 and became a general partner in 2001. Prior to joining WCAS, Mr. Swani worked at Fox Paine & Company, L.L.C. from June 1998 to May 1999 and was with Morgan Stanley & Co. Incorporated in their mergers & acquisitions area from 1994 to 1998 and in their debt capital markets area from 1988 to 1990. Mr. Swani has an undergraduate degree from Princeton University (1987) and graduate degrees from the MIT Sloan School of Management (1994) and Harvard Law School (1994). Mr. Swani currently serves on the Board of Directors of ITC DeltaCom, Inc. and several privately-held companies including Ozburn-Hessey Logistics, Inc., Venture Transport Logistics, L.L.C., and Global Knowledge Networks, Inc.
 
Management of Mobile Mini After the Merger
 
Upon completion of the merger, the executive management team of the combined company will include senior executives from Mobile Mini and from Mobile Storage Group. Steve Bunger will continue to serve as Chairman, President and Chief Executive Officer and Larry Trachtenberg will continue to serve as Chief Financial Officer. Doug Waugaman, CEO of Mobile Storage Group, is expected to join Mobile Mini as COO of Integration. Jody Miller, Bill Armstead, Ron Halchishak and Jeffrey Kluckman, senior executives at Mobile Storage Group, are expected to assume senior roles at Mobile Mini.
 
Governmental and Regulatory Matters
 
The consummation of the merger is conditioned upon all applicable waiting periods under HSR having expired or otherwise terminated. On March 5, 2008, Mobile Mini and Mobile Storage Group each filed HSR pre-merger notification and report forms with the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission for review in connection with the proposed merger. HSR provides for an initial 30-calendar-day waiting period following the necessary filings by the parties to the merger.


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Anticipated Accounting Treatment
 
Mobile Mini intends to account for the merger as a purchase of Mobile Storage Group in accordance with generally accepted accounting principles in the United States. Mobile Storage Group will be treated as the acquired entity for such purposes. Accordingly, the aggregate fair value of the consideration paid by Mobile Mini in connection with the merger will be allocated to Mobile Storage Group’s assets based on their fair values as of the completion of the merger. The difference between the fair value of Mobile Storage Group’s assets, liabilities and other items and the aggregate fair value of the consideration paid by Mobile Mini will be recorded as goodwill and other assets and intangibles. The results of operations of Mobile Storage Group will be included in Mobile Mini’s consolidated results of operations only for periods subsequent to the completion of the merger.
 
However, for U.S. federal income tax purposes, Mobile Mini will inherit the Mobile Storage Group’s basis in its assets and will not be able to step up that tax basis to reflect the purchase price or the value of the assets.
 
No Appraisal Rights
 
Under Delaware law, Mobile Mini stockholders will not have appraisal rights pursuant to the merger and the other transactions contemplated by the Merger Agreement.
 
Financing
 
In anticipation of the merger, we have obtained a commitment letter, or the Commitment Letter, from Deutsche Bank Securities Inc., Deutsche Bank AG New York Branch, Bank of America Securities LLC, Bank of America, N.A., J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A., dated February 22, 2008, with respect to a first lien senior secured revolving credit facility under which we may borrow up to $1.0 billion, subject to a borrowing base. We intend to use a portion of the proceeds from such credit facility to refinance our existing credit facility, to pay the cash portion of the merger consideration and the transaction costs related to the merger. The proceeds will also be used to refinance a portion of the approximately $535.0 million of the Mobile Storage Group indebtedness to be assumed in connection with the merger as well as amounts outstanding under our existing revolving credit facility. In connection with the Commitment Letter, we have agreed to pay certain fees to the arrangers and lenders under the credit facility.
 
The credit facility will have a U.S. facility and a U.K. subfacility. Mobile Mini and certain of its U.S. subsidiaries will be borrowers under the U.S. facility and the U.S. facility will be guaranteed by substantially all U.S. subsidiaries that are not borrowers. The U.K. subsidiaries will be borrowers under the U.K. subfacility, and Mobile Mini and substantially all other subsidiaries that are not U.K. borrowers will be guarantors of the U.K. subfacility. The U.S. facility will be secured by a first priority lien on substantially all assets of the U.S. borrowers and U.S. guarantors. The U.K. subfacility will be secured by a first priority lien on substantially all of the assets of Mobile Mini and its subsidiaries.
 
The credit facility will have a term of five years from the date of the execution and delivery of the definitive financing agreement and related documentation. The U.K. sub-facility will have a borrowing limit of not more than $200 million, and borrowings under such facility may be made in Pounds Sterling or Euros. The availability of borrowings under the credit facility will be subject to a borrowing base calculated as a discount to the value of certain pledged collateral. The credit facility will include an uncommitted incremental credit facility of up to $250.0 million. The credit facility will contain optional and mandatory prepayment provisions consistent with our existing revolving credit facility, with such modifications as may be appropriate given the merger and the related transactions.
 
Borrowings under the credit facility will bear interest at a rate equal to, at our option, either (a) LIBOR plus an applicable margin or (b) the prime rate plus an applicable margin. We expect that the initial applicable margin for borrowings will be 0.75% with respect to prime rate borrowings and 2.25% with respect to LIBOR borrowings, in each case subject to adjustment pursuant to a “market flex” provision. The applicable margins may adjust from time to time based on our leverage ratio. In addition to paying interest on outstanding principal under the credit facility, we will be required to pay an unused line fee to the lenders under the revolving credit facilities in respect of the unutilized commitments thereunder. The unused line fee rate is 0.375% per annum if the unused amount is less than


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or equal to 50% of the aggregate commitments or 0.25% per annum if the unused amount is greater than 50%. We must also pay customary letter of credit fees.
 
The commitments of the banks under the Commitment Letter are subject to, among other things, the consummation of the merger on or before August 15, 2008, and other conditions customary in transactions of this sort, including that since December 31, 2006, there has occurred no event, fact or circumstance that has caused or could reasonably be expected to have a material adverse effect on Mobile Mini, and since September 30, 2007, there has occurred no event, fact or circumstance that has caused or could reasonably be expected to cause a material adverse effect on Mobile Storage. We anticipate that the definitive financing agreement will include (i) representations and warranties, covenants and events of default consistent with our existing revolving credit facility, with such modifications as may be appropriate given the merger and the related transactions, (ii) financial maintenance covenants consisting of maximum leverage ratio, minimum fixed charge coverage ratio and minimum utilization rate, each of which shall only be tested if excess availability under our borrowing base is less than the greater of (a) $100.0 million and (b) 10% of the total commitments under the credit facility and (iii) customary indemnities for the lenders under the credit facilities.


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THE AGREEMENT AND PLAN OF MERGER
 
The following summary describes the material provisions of the Merger Agreement. This summary may not contain all of the information about the Merger Agreement that is important to you and is qualified in its entirety by reference to the Merger Agreement, which is included as Annex A to this proxy statement. We urge you to read the entire Merger Agreement and the other annexes to this proxy statement carefully and in their entirety.
 
The Merger Agreement has been included to provide you with information regarding its terms. The terms and information in the Merger Agreement should not be relied on as disclosure about Mobile Mini, Cactus Merger Sub, Inc. or Mobile Storage Group without consideration of the information provided elsewhere in this document and in the documents incorporated by reference into this document, including the periodic and current reports and statements that Mobile Mini files with the Securities and Exchange Commission. The terms of the Merger Agreement (such as the representations and warranties) govern the contractual rights and relationships, and allocate risk, among the parties in relation to the merger. In particular, the representations and warranties made by the parties to each other in the Merger Agreement have been negotiated among the parties with the principal purpose of setting forth their respective rights with respect to their obligation to close the merger should events or circumstances change or be different from those stated in the representations and warranties. Matters may change from the state of affairs contemplated by the representations and warranties. None of Mobile Mini, Cactus Merger Sub, Inc. or Mobile Storage Group undertakes any obligation to publicly release any revisions to the representations and warranties, except as required under U.S. federal or other applicable securities laws.
 
Structure of the Merger
 
On February 22, 2008, we entered into the Merger Agreement with Cactus Merger Sub, Inc., a wholly-owned subsidiary of Mobile Mini, MSG WC Holdings Corp., and WCAS, as representative of the stockholders of MSG WC Holdings Corp., pursuant to which Cactus Merger Sub will merge with and into MSG WC Holdings Corp. Immediately after the merger, MSG WC Holdings Corp. and two of its subsidiaries will be merged into Mobile Mini.
 
Cancellation of Stock held by Stockholders of Mobile Storage Group.  Each share of Mobile Storage Group’s common stock issued and outstanding immediately prior to the effective time of the merger and held by the stockholders of Mobile Storage Group, and all rights in respect thereof shall, by virtue of the merger and without any action on the part of the stockholder, forthwith cease to exist and be converted into and represent the right to receive an amount, in cash and shares of Mobile Mini’s preferred stock equal to the Merger Consideration divided by the number of shares of Mobile Storage Group’s common stock issued and outstanding immediately prior to the effective time of the merger and held by the stockholders of Mobile Storage Group.
 
Conversion of Cactus Merger Sub Stock.  At the effective time of the merger, by virtue of the merger and without any action on the part of any party, each share of Cactus Merger Sub, Inc.’s common stock issued and outstanding immediately prior to the effective time of the merger, will be converted into and exchanged for one validly issued, fully paid, and nonassessable share of the surviving corporation’s common stock. Each stock certificate of Cactus Merger Sub, Inc. evidencing ownership of any such shares will from and after the effective time of the merger, evidence ownership of shares of the Mobile Storage Group’s common stock, so that, after the effective time of the merger, Mobile Mini shall be the holder of all of the issued and outstanding shares of the Mobile Storage Group’s common stock.
 
Effect on Options.  Immediately prior to the effective time of the merger, all options issued under the option plans of Mobile Storage Group (other than the options held by William Armstead, Jeffrey Kluckman, Jody Miller and Allan Villegas pursuant to certain nonqualified stock option agreements with Mobile Storage Group, dated August 1, 2006) that are outstanding on such date will be cancelled and will cease to exist, and the holder of such options will cease to have any rights with respect thereto, except with respect to Messrs. Armstead, Kluckman, Villegas and Miller who will have the right to receive a pro rata portion of the Merger Consideration. The pro rata portion of the stockholders of Mobile Storage Group shall be calculated as if the options held by William Armstead, Jeffrey Kluckman, Jody Miller and Allan Villegas were exercised for cash immediately prior to the effective time of the merger and William Armstead, Jeffrey Kluckman, Jody Miller and Allan Villegas shall receive a pro rata portion of the Merger Consideration.


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No Further Ownership Rights in Mobile Storage Group Common Stock.  At and after the effective time of the merger, each stockholder of Mobile Storage Group shall cease to have any rights as a stockholder of Mobile Storage Group, except as otherwise required by applicable law and except for the right of each stockholder of Mobile Storage Group to surrender his or her stock certificate or lost stock certificate affidavit in exchange for payment of the applicable Merger Consideration, and no transfer of Mobile Storage Group common stock shall be made on the stock transfer books of the surviving corporation. At the close of business on the day of the effective time of the merger the stock ledger of Mobile Storage Group shall be closed.
 
Merger Consideration
 
Merger Consideration.  Upon completion of the merger, the stockholders of Mobile Storage Group shall receive $701,500,000 less the Net Debt of Mobile Storage Group, plus or minus the Net Debt Adjustment, plus or minus the Working Capital Adjustment, plus or minus the Capital Expenditure Adjustment minus the unpaid Transaction Expenses of Mobile Storage Group plus the Acquisition Amount, which we refer to as the Merger Consideration.
 
Closing Statement and Estimated Merger Consideration.  At least 3 business days, but not more than 5 business days, prior to the closing date, Mobile Storage Group shall deliver to Mobile Mini a statement, as of the closing date, setting forth Mobile Storage Group’s good faith calculation of the estimated Merger Consideration based on Mobile Storage Group’s estimates of its Net Debt, the Net Debt Adjustment, the Working Capital Adjustment, the Capital Expenditures Adjustment, its unpaid Transaction Expenses and the Acquisition Amount.
 
“Acquisition Amount” means the value of any corporate acquisition by Mobile Storage Group or any of its subsidiaries approved by Mobile Mini in writing.
 
“Net Debt” means the consolidated indebtedness of Mobile Storage Group and its subsidiaries minus the consolidated cash and cash equivalents of Mobile Storage Group and its subsidiaries as of the closing.
 
“Net Debt Adjustment” means the amount, if any, by which the Net Debt is greater or less than $535,000,000.
 
“Working Capital Adjustment” means the amount, if any, by which the working capital is greater than $1,500,000 or is less than -$1,500,000 as of the closing (if the working capital is between $1,500,000 and -$1,500,000, the Working Capital Adjustment shall be $0.00).
 
“Capital Expenditure Adjustment” means the amount, if any, by which Mobile Storage Group’s consolidated capital expenditures for the period commencing on January 1, 2008 and ending on the closing date is greater or less than the capital expenditures amount for the same period shown on, or derived from, the adjusted capital expenditures budget of Mobile Storage Group for the calendar year ended December 31, 2008 made available to Mobile Mini (as adjusted in the event the closing date is a date other than the last day of a calendar month).
 
“Transaction Expenses” means the amount payable by Mobile Storage Group for all out-of-pocket costs and expenses incurred by Mobile Storage Group or on behalf of its stockholders in connection with the merger, such as brokers’ fees, advisors’ fees and expenses, required consent payments, “stay-around” and similar bonuses or payments to current or former directors, officers, employees and consultants paid as a result or in connection with the merger as of the closing other than the payments under the agreed to retention bonus plan.
 
To the extent the estimated Merger Consideration payable at closing exceeds $154,000,000, the stockholders of Mobile Storage Group will receive the aggregate of 8,555,556 shares of preferred stock of Mobile Mini valued at $18.00 per share plus an amount of cash equal to the amount by which the estimated Merger Consideration exceeds $154,000,000. If the estimated Merger Consideration is equal to or less than $154,000,000, the stockholders of Mobile Storage Group will only receive an amount of shares of preferred stock of Mobile Mini equal to the estimated Merger Consideration divided by $18.00.
 
At the closing, the Mobile Storage Group stockholders will place into escrow $15,000,000 of the estimated Merger Consideration (in cash and/or shares of Mobile Mini preferred stock valued at $18.00 per share) to satisfy any post-closing adjustments of the Merger Consideration and to secure their indemnification obligations under the Merger Agreement. At all times while shares of Mobile Mini preferred stock are held in escrow, the stockholders of Mobile Storage Group shall have the right to (i) exercise any voting rights with respect to the escrowed shares of


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preferred stock, and (ii) receive all products and proceeds of any of the escrowed shares of preferred stock, including all dividends, whether in the form of cash, stock or any other form, and any other rights and other property which the stockholders of Mobile Storage Group are, from time to time, entitled to receive in respect of, or in exchange, for any or all of the escrowed shares.
 
Merger Consideration Adjustments.  The estimated Merger Consideration will be subject to post-closing adjustments. To the extent the Merger Consideration as finally determined is greater or less than the estimated Merger Consideration paid at closing, Mobile Mini or the stockholders of Mobile Storage Group, as the case may be, shall pay the appropriate merger consideration adjustment pursuant to the terms of the Merger Agreement. Pursuant to the Merger Agreement, the stockholders of Mobile Storage Group may elect to pay in cash any merger consideration adjustment in lieu of releasing or returning any preferred stock held in escrow or otherwise.
 
In no event shall Mobile Mini be obligated to issue to the stockholders of Mobile Storage Group more than 8,555,556 shares of preferred stock.
 
Surviving Corporation, Governing Documents and Officers and Directors
 
At the effective time of the merger, the certificate of incorporation and by-laws of Mobile Storage Group, as in effect immediately prior to such effective time, will be the certificate of incorporation and by-laws respectively of the surviving corporation of the merger. Subject to Mobile Mini’s right to request the resignation of Mobile Storage Group’s officers and directors at the effective time of the merger, the officers and directors of Mobile Storage Group prior to the effective time of the merger will continue to be the officers and directors of the surviving corporation of the merger, subject to the applicable provisions of the certificate of incorporation and by-laws of the surviving corporation.
 
Closing
 
Unless the parties agree otherwise, the completion of the merger will occur on a date to be specified by Mobile Mini and Mobile Storage Group that will be no later than 3 business days immediately following the day on which the last of the closing conditions (other than any conditions that by their nature are to be satisfied at the closing) is satisfied or waived. See “— Conditions to the Merger” beginning on page 46. The parties currently expect to complete the merger in the second quarter of 2008.
 
Effective Time of the Merger
 
The merger will become effective upon the acceptance of the filing of a certificate of merger in accordance with Section 251 of the Delaware Law with the Secretary of State of the State of Delaware, or at such other subsequent date or time as Mobile Mini, Cactus Merger Sub, Inc. and Mobile Storage Group may agree and specify in the certificate of merger. Mobile Mini, Cactus Merger Sub, Inc. and Mobile Storage Group will file the certificate of merger on the closing date of the merger.
 
Representations and Warranties
 
The Merger Agreement contains representations and warranties made by Mobile Storage Group to Mobile Mini and Cactus Merger Sub, Inc. relating to a number of matters, including the following:
 
  •  corporate authorization to execute, deliver and perform the Merger Agreement, and the enforceability of the Merger Agreement;
 
  •  absence of conflicts with, or violations of, organizational documents, applicable law or other obligations as a result of the execution, delivery and consummation of the transactions contemplated by the Merger Agreement;
 
  •  due organization and good standing;
 
  •  capitalization;
 
  •  due organization, good standing and capitalization of the subsidiaries of Mobile Storage Group;


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  •  timely filing of documents required to be filed with the Securities and Exchange Commission, accuracy of such filings, compliance of such filings with applicable federal securities law requirements and establishment and maintenance of disclosure controls and procedures;
 
  •  accuracy of information to be provided by Mobile Storage Group for inclusion in this proxy statement;
 
  •  accuracy of selected financial statements;
 
  •  absence of certain undisclosed liabilities;
 
  •  accuracy of minute books;
 
  •  title and condition of tangible personal property and assets and accuracy of list of rental fleet of storage trailers, storage containers and portable offices provided to Mobile Storage Group;
 
  •  owned and leased real properties;
 
  •  material contracts;
 
  •  litigation;
 
  •  tax matters;
 
  •  insurance;
 
  •  intellectual property matters;
 
  •  compliance with laws;
 
  •  relationship with customers;
 
  •  labor and employment relations;
 
  •  employee benefit plan matters;
 
  •  environmental matters;
 
  •  affiliate transactions;
 
  •  obtaining of and compliance with permits;
 
  •  absence of any material adverse effect and certain other changes or events;
 
  •  brokers’ or finders’ fees;
 
  •  absence of certain changes in the business;
 
  •  absence of conduct of business; and
 
  •  scope of representations and warranties and disclaimer of implied and other representations and warranties in the Merger Agreement and related documents.
 
The Merger Agreement also contains representations and warranties made by Mobile Mini and Cactus Merger Sub, Inc. to Mobile Storage Group relating to a number of matters, including the following:
 
  •  corporate authorization to execute, deliver and perform the Merger Agreement, and the enforceability of the Merger Agreement;
 
  •  absence of conflicts with, or violations of, organizational documents, applicable law or other obligations as a result of the execution, delivery and consummation of the transactions contemplated by the Merger Agreement;
 
  •  due organization and good standing;
 
  •  capitalization;
 
  •  due organization, good standing and capitalization of certain subsidiaries of Mobile Mini;


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  •  timely filing of documents required to be filed with the Securities and Exchange Commission, accuracy of such filings, compliance of such filings with applicable federal securities law requirements and establishment and maintenance of disclosure controls and procedures;
 
  •  accuracy of information to be provided by Mobile Mini or Cactus Merger Sub, Inc. for inclusion in this proxy statement;
 
  •  accuracy of selected financial statements;
 
  •  absence of certain undisclosed liabilities;
 
  •  accuracy of list of rental fleet of storage trailers, storage containers and portable offices provided to Mobile Storage Group;
 
  •  litigation;
 
  •  tax matters;
 
  •  compliance with laws;
 
  •  employee benefit plan matters;
 
  •  absence of certain changes in the business;
 
  •  brokers’ or finders’ fees;
 
  •  effectiveness of debt financing commitments and sufficiency of funds available to Mobile Mini to consummate the transactions contemplated by the Merger Agreement and to pay all related fees and expenses; and
 
  •  scope of representations and warranties and disclaimer of implied and other representations and warranties in the Merger Agreement and related documents.
 
The representations and warranties contained in the Merger Agreement were made for purposes of the Merger Agreement and are subject to qualifications and limitations agreed to by the respective parties in connection with negotiating the terms of the Merger Agreement. In addition, certain representations and warranties were made as of a specific date, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts. This description of the representations and warranties, and their reproduction in the copy of the Merger Agreement attached to this proxy statement as Annex A, are included solely to provide investors with information regarding the terms of the Merger Agreement. Accordingly, the representations and warranties and other provisions of the Merger Agreement should not be read alone, but instead should only be read together with the information provided elsewhere in this proxy statement and in the documents incorporated by reference into this proxy statement, including the periodic and current reports and statements that Mobile Mini file with the SEC. See “— Where You Can Find More Information” beginning on page 94.
 
Certain of these representations and warranties are qualified by “materiality” or “material adverse effect”. For purposes of the Merger Agreement, a “material adverse effect” with respect to Mobile Storage Group or Mobile Mini, as the case may be, means any event, circumstance, fact, change or effect that, individually or in the aggregate, is or would reasonably be expected to be materially adverse (i) to the business, assets, liabilities, results of operation or financial condition of that party and its subsidiaries, taken as a whole or (ii) on the ability of that party to materially perform its obligations under the Merger Agreement, other than a material adverse effect that arises or results from any of the following:
 
  •  changes in general political, economic, financial, capital market or industry-wide conditions;
 
  •  changes in law or changes in generally accepted accounting principles, or GAAP;
 
  •  acts of war (whether or not declared), political unrest, terrorism or escalation of hostilities;


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  •  the announcement or other disclosure of the Merger Agreement or the transactions contemplated thereby; and
 
  •  action taken by a party expressly required by the Merger Agreement;
 
except, in the case of the first three points above, to the extent such change has a disproportionately negative effect on such party and its subsidiaries (taken as whole), compared with other companies operating in the same industry.
 
The representations and warranties in the Merger Agreement survive until 12 months after the closing date of the merger. If the Merger Agreement is validly terminated, there will be no liability under the representations and warranties of the parties, or otherwise under the Merger Agreement, except as described below under “— Effect of Termination” and “— Termination Fees and Expenses” beginning on page 49.
 
Covenants and Agreements
 
Conduct of Business of Mobile Storage Group Pending the Merger.  Mobile Storage Group has agreed that, except as set forth in the Merger Agreement, during the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Storage Group will cause each of its subsidiaries to carry on its business in the ordinary and usual course and to use all commercially reasonable efforts to preserve intact its present business organizations, keep available the services of its officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, customers and others with which it has a business relationship.
 
Additionally, Mobile Storage Group has agreed that, except as may be approved in writing by Mobile Mini or as expressly permitted or required by the Merger Agreement, prior to the completion of the merger, Mobile Storage Group will not, and will cause each of its subsidiaries to, refrain from the following (provided, however, that this provision shall not be construed to give to Mobile Mini, directly or indirectly, the right to control or direct Mobile Storage Group’s businesses or operations prior to the completion of the merger:
 
  •  amending or restating of charter or by-laws;
 
  •  issuing, or delivering (i) any capital stock of, or other equity or voting interest in, Mobile Storage Group or its subsidiaries or (ii) any securities convertible into, exchangeable for or evidencing the right to subscribe for or to acquire (x) any shares of capital stock of, or other equity or voting interest in Mobile Storage Group or any of its subsidiaries or (y) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or to acquire, any shares of capital stock of, or other equity or voting interest in, Mobile Storage Group or any of its subsidiaries, except for issuances of capital stock of Mobile Storage Group or its subsidiaries upon the exercise of any outstanding options or warrants;
 
  •  declaring, paying or setting aside any dividend or other distribution other than dividends or distributions by any subsidiary to Mobile Storage Group, or splitting, combining, redeeming, reclassifying, purchasing or otherwise acquiring directly, or indirectly, any shares of capital stock of, or other equity or voting interest in Mobile Storage Group or its subsidiaries (except for purchases of equity of Mobile Storage Group or its subsidiaries, held by its management or making any other change in the capital structure of Mobile Storage Group or its subsidiaries);
 
  •  increasing the compensation payable (including wages, salaries and bonuses or any other renumeration) or to become payable to any employee or agent being paid an annual base salary of $150,000 or more, or to any officer or director of Mobile Storage Group, other than pursuant to existing contracts or applicable law;
 
  •  making of any bonus, profit sharing, pension, retirement or insurance payment, distribution or arrangement to or with any officer, employee or agent being paid an annual base salary of $150,000 or more or any director of Mobile Storage Group, except for payments (i) in connection with a transaction retention program mutually agreed to by Mobile Mini and Mobile Storage Group, (ii) accrued prior to the date of the Merger Agreement, (iii) required by the terms of any employee benefit plan, (iv) made in the ordinary course of business consistent with past practice, or (v) otherwise required by applicable law;


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  •  establishing, adopting, entering into, amending or terminating of any material employee benefit plan or any collective bargaining, thrift, compensation or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees other than the implementation of a transaction retention program mutually agreed to by Mobile Mini and Mobile Storage Group;
 
  •  entering into, materially amending or terminating any material contract;
 
  •  incurring, assuming or modifying any indebtedness (other than revolving indebtedness incurred pursuant to the existing credit facility of Mobile Storage Group and its subsidiaries) or capitalized lease obligations exceeding $4,000,000 in the aggregate, in each case, in the ordinary course of business consistent with past practice;
 
  •  subjecting any material property or assets or any capital stock, or other equity or voting interests to any lien other than permitted liens;
 
  •  selling transfering, leasing, licensing or otherwise disposing any assets or properties in excess of $50,000 individually or $200,000 in the aggregate other than (i) sales of equipment in the ordinary course of business consistent with past practice, (ii) leases or licenses entered into in the ordinary course of business consistent with past practice, and (iii) sales of trailers, containers and wood offices and other units in the ordinary course of business consistent with past practice solely as part of the normal course of retail sales;
 
  •  except for certain exceptions, acquiring any business or entity, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
 
  •  making of any capital expenditure or commitment thereto not contemplated by the Mobile Storage Group capital expenditures budget or otherwise, acquiring any assets or properties other than supplies or inventory in the ordinary course of business consistent with past practice or make any change to capital expenditures budget, the Mobile Storage Group capital expenditures budget;
 
  •  writing-off as uncollectible any notes or accounts receivable, except write-offs in the ordinary course of business consistent with past practice;
 
  •  canceling or waiving any claims or rights of substantial value;
 
  •  making any change in any method of accounting or auditing practice other than those required by GAAP or by applicable laws;
 
  •  except as required by any applicable law or order, making any material tax election or settle and/or compromise any material tax liability (except for settlements in connection with tax audits in the ordinary course of business), preparing any tax returns in a manner materially inconsistent with the past practices or filing any material amended tax return or claim for refund of taxes;
 
  •  except for certain exceptions, paying, discharging, settling or satisfying any claims, liabilities, legal proceedings or obligations in excess of $100,000;
 
  •  planning, announcing, implementing or effecting of any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees (other than individual employee terminations in the ordinary course of business);
 
  •  making of any loans, advances or capital contributions to, or investments in, any entity other than to Mobile Storage Group’s subsidiaries;
 
  •  entering into any contract or letter of intent (whether or not binding) with respect to, or committing or agreeing to do, whether or not in writing, any of the foregoing;
 
  •  taking any action which may cause Mobile Mini and its subsidiaries to incur losses as a consequence of any breach of certain applicable UK laws concerning employment rights; or
 
  •  financing capital expenditures by entering into operating leases in a manner inconsistent with past practice.


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Additionally, Mobile Storage Group and its subsidiaries have agreed that, during the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement, they shall use all commercially reasonable efforts to (i) confer on a monthly basis with one or more designated representatives of Mobile Mini regarding operational matters (including employee and human resources related matters) and the general status of ongoing operations to the extent permitted by law and (ii) keep all insurance policies currently maintained with respect to Mobile Storage Group and its subsidiaries and their respective assets and properties, or suitable replacements or renewals, in full force and effect through the close of business until the completion of the merger. Neither Mobile Storage Group nor its subsidiaries MSG WC Intermediary Co. and Mobile Services Group, Inc. will conduct any business, incur any new indebtedness or hold any new assets other than the equity interests of their respective subsidiaries. Further, Mobile Storage Group has agreed to provide Mobile Mini with a monthly consolidated balance sheet of Mobile Storage Group and its subsidiaries for the preceding month and the related profit and loss statement when they are available, and has agreed to cause its Chief Executive Officer and Chief Financial Officer to be available to discuss such financial statements and the operating performance of Mobile Storage Group. Mobile Storage Group has also agreed to provide Mobile Mini with its final audited 2007 financial statements after it is received from Mobile Storage Group’s auditors, and to notify Mobile Mini upon obtaining any knowledge of any proposed audit adjustments to the draft financial statements of Mobile Services Group, Inc. and its subsidiaries as at December 31, 2007.
 
Conduct of Business of Mobile Mini Pending the Merger.  During the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement. Mobile Mini has agreed not to:
 
  •  amend or restate its charter or by-laws, other than Mobile Mini’s filings with the Secretary of State of the State of Delaware following approval of the merger by Mobile Mini’s stockholders;
 
  •  declare, pay or set aside any dividend or make any distribution other than dividends or distributions by any subsidiary of Mobile Mini to Mobile Mini or any other wholly owned subsidiary of Mobile Mini;
 
  •  split, combine, redeem, reclassify, purchase or otherwise acquire directly, or indirectly (other than pursuant to Mobile Mini’s previously announced share buyback program), any shares of capital stock of, or other equity or voting interest in, Mobile Mini or its subsidiaries except for purchases of equity held by management of Mobile Mini or its subsidiaries; or
 
  •  incur any indebtedness for borrowed money which would reasonably be expected to cause the conditions to the debt financing to be obtained by Mobile Mini not to be satisfied.
 
Further, Mobile Mini has agreed that, during the period commencing on February 22, 2008 and ending at the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Mini will, and will cause each of its subsidiaries to, use all commercially reasonable efforts to confer on a monthly basis with one or more designated representatives of Mobile Storage Group regarding operational matters (including employee and human resources related matters) and the general status of ongoing operations.
 
Exclusivity.  From February 22, 2008 and until the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Storage Group and its subsidiaries have agreed not to engage in any discussions or negotiations with, or provide any information to, any person or entity (other than Mobile Mini and its affiliates and representatives), concerning any purchase of any capital stock of Mobile Storage Group or any of its subsidiaries or any merger, consolidation or other business combination, asset sale, recapitalization or similar transaction involving Mobile Storage Group or any of its subsidiaries. Mobile Storage Group has agreed to notify Mobile Mini as soon as practicable after Mobile Storage Group has knowledge of any person making any proposal, offer, inquiry, or contact with Mobile Storage Group, with respect to any such proposal for purchase of capital stock, merger, consolidation, asset sale, recapitalization or similar transaction involving Mobile Storage Group or its subsidiaries and to describe the identity of the person making such proposal and the substance and material terms of such contact and such proposal.
 
Mobile Mini has agreed not to knowingly solicit during the period commencing on February 22, 2008 and ending on the earlier of the date that is 4 months from February 22, 2008 or on the date of the completion of the merger, any proposals to acquire Mobile Mini.


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Access to Information.  The Merger Agreement provides mutual rights to each of Mobile Storage Group and Mobile Mini to access the properties, books and records of the other party, and obligates each party to provide information regarding its business and properties to the other party to the extent permitted by law. Each of Mobile Mini and Mobile Storage Group and their respective subsidiaries agree to permit the other party and its representatives to have reasonable access during normal business hours and on reasonable written advance notice, to its premises and to its properties, books and records and shall cause its officers, employees counsel, accountants, consultants and other representatives to furnish the other party with such financial and operating data and other information with respect to its business and properties as such other party shall request from time to time. Such investigation and assistance shall not unreasonably disrupt the operations of the party providing access to such investigation, cause the loss of attorney/client privilege, and any information provided pursuant to such investigation by either Mobile Mini or Mobile Storage Group or their respective subsidiaries shall be subject to the terms of the mutual confidentiality agreement, between Mobile Storage Group and Mobile Mini.
 
Notification of Certain Matters.  Mobile Storage Group agrees to provide prompt written notice to Mobile Mini of (i) any notice of, or other communication relating to, a default or event of default under any material contact, (ii) any representation or warranty made by Mobile Storage Group in the Merger Agreement or in any instrument delivered pursuant to it becoming untrue or inaccurate in any material respect, (iii) the failure of any condition precedent to either party’s obligations, and (iv) any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by the Merger Agreement. The Merger Agreement provides that such notice shall amend Mobile Storage Group’s disclosure letter for informational purposes only and will not affect Mobile Mini’s remedies under the Merger Agreement, or cure any breach of any covenant, representation or warranty in the Merger Agreement or related agreements for any purpose, including satisfaction of closing conditions and Mobile Mini’s rights to indemnification.
 
Debt Financing.  Mobile Mini agrees to use all commercially reasonable efforts to (i) maintain in full force and effect the Commitment Letter and refrain from amending, terminating, or waiving any provisions under the Commitment Letter, (ii) to the extent within its control, comply with all of its covenants in, and as promptly as practicable take all actions necessary or desirable to cause all of the conditions to the funding of the financing contemplated in, the Commitment Letter, and ensure that there is no breach or default or event of default under any of its existing financing agreements, and (iii) accept any changes in the terms and conditions of the proposed financing contemplated in the “market flex” provision of the Commitment Letter or fee letter related thereto. Mobile Mini agrees to notify Mobile Storage Group following receipt of any notification from any financing source under the Commitment Letter or other financing of such source’s indications that it does not intend to provide, questions its requirement to provide or asserts its inability or refusal to provide the financing described in the Commitment Letter.
 
If the funding under the Commitment Letter becomes unavailable or Mobile Mini reasonably believes that such funding may not occur (other than due to breach by Mobile Storage Group of the Merger Agreement or related agreements), Mobile Mini agrees to use all commercially reasonable efforts to obtain alternative financing on terms that are no less favorable than to those contained in the Commitment Letter. Mobile Mini shall keep Mobile Storage Group reasonably informed of any material adverse developments relating to the proposed debt financing.
 
Affiliate Agreements.  Mobile Storage Group agrees to, and to cause its subsidiaries to, terminate at or prior to the completion of the merger, without payment or penalty, certain contracts between Mobile Storage Group or its subsidiaries and any of their affiliates (other than Mobile Storage Group or its subsidiaries) set forth on Mobile Storage Group’s disclosure letter to the Merger Agreement.
 
Mobile Storage Group’s Option Plans.  Mobile Storage Group agrees, as of the time of the completion of the merger, to take all actions necessary to (i) terminate all stock option plans (other than the options held by Messrs. Armstead, Kluckman, Villegas and Miller, all of whom will receive their respective pro rata portion of the Merger Consideration), stock incentive plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of Mobile Storage Group or its subsidiaries, (ii) cancel, terminate, and forfeit, all outstanding stock options, shares of restricted stock, or other awards in respect of the capital stock of Mobile Storage Group or its subsidiaries granted pursuant to such stock option plans or stock


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incentive plans, and (iii) amend provisions of any employee benefit plan providing for the issuance, transfer or grant of any capital stock of, or any interest in respect of capital stock of, Mobile Storage Group or its subsidiaries.
 
WARN.  Mobile Storage Group shall be liable for any obligations with respect to employees arising under the Worker Adjustment and Retraining Notification Act, or WARN, and similar applicable state laws to the extent arising from the actions taken by Mobile Storage Group or its subsidiaries (not at the direction of Mobile Mini) on or prior to the completion of the merger. Mobile Storage Group agrees to cooperate with Mobile Mini in connection with providing notices under the WARN or similar applicable state laws and to notify Mobile Mini prior to announcing, implementing or effecting certain “employment losses” on or prior to the completion of the merger. On the date of the completion of the merger, Mobile Storage Group shall provide Mobile Mini with a list, by date and location, of such “employment losses” that occurred within the preceding 90 days or are scheduled to occur on or after the completion of the merger.
 
UK Employees.  From February 22, 2008 until the earlier of the completion of the merger or the termination of the Merger Agreement, Mobile Storage Group and its subsidiaries agree to consider written requests from Mobile Mini with respect to compliance with obligations imposed by certain applicable UK laws with respect to employees of Mobile Storage Group’s subsidiaries in the United Kingdom. If Mobile Storage Group and its subsidiaries decide to implement any such written requests of Mobile Mini, Mobile Mini shall indemnify stockholders and affiliates of Mobile Storage Group against losses incurred or suffered by them arising from the implementation of any such written request.
 
Indemnification of Directors and Officers.  Mobile Mini agrees that its organizational documents shall contain provisions no less favorable with respect to the limitation or elimination of liability and indemnification than are set forth in the organizational documents of Mobile Storage Group as of the date of the Merger Agreement. Such provisions shall not be amended, repealed or otherwise modified for a period of 6 years after the completion of the merger in any manner materially adverse to individuals who are directors or officers of Mobile Storage Group or its subsidiaries prior to the completion of the merger. Mobile Mini also agrees to purchase tail insurance covering each person currently covered by the Mobile Storage Group’s or its subsidiaries’ directors’ and officers’ liability insurance policies, with respect to matters or circumstances occurring at or prior to the completion of the merger, on coverage terms that are equivalent in all material respects to the coverage terms of such current insurance policies in effect for Mobile Storage Group and its subsidiaries on the date of the Merger Agreement.
 
Parent Organizational Documents.  Immediately prior to the effective time and assuming the receipt of Mobile Mini’s stockholders approval, Mobile Mini shall file with the Secretary State of the State of Delaware the amendment to its certificate of incorporation and the certificate of designation to be effective immediately prior to the effective time.
 
Waiver of Standstill.  Regardless the standstill provisions of the mutual confidentiality agreement between Mobile Storage Group and Mobile Mini, after this proxy statement has been mailed to Mobile Mini’s stockholders, WCAS, the majority stockholder of Mobile Storage Group, shall be permitted to purchase up to 2,000,000 shares of common stock of Mobile Mini in the aggregate, subject to applicable laws. Such purchases shall not be permitted to be made in the event WCAS is in possession of material non-public information. Such purchases may be effectuated through market trades or private purchases. Two business days prior to the completion of the merger, Mobile Storage Group shall deliver a certificate to Mobile Mini containing a list of each such purchase that includes the name of the acquiring person, the number of shares acquired, the means by which such shares were acquired, the date of each such purchase, and the purchase prices paid by such persons. After the completion of the merger, WCAS shall notify Mobile Mini in writing within 2 business days after such purchase of securities, which notice shall contain the same information described in the immediately preceding sentence.
 
Financial Reports.  Promptly following their availability in the ordinary course of business, Mobile Mini shall provide Mobile Storage Group with a monthly consolidated balance sheet of Mobile Mini and its subsidiaries for the preceding month and the related profit and loss statement, and shall cause Mobile Mini’s Chief Executive Officer and the Chief Financial Officer to be available to discuss such financial statements and the financial and operating performance of Mobile Mini as reasonably requested by Mobile Storage Group.


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Compensation and Benefits.  For at least 9 months following the completion of the merger, Mobile Mini will cause the surviving corporation to provide compensation and benefits to the employees of Mobile Storage Group as of the completion of the merger that are substantially equivalent in the aggregate to either the compensation and benefits received by such continuing employees of Mobile Storage Group prior to the completion of the merger, or the compensation and benefits provided to similarly situated employees of Mobile Mini and its subsidiaries.
 
Unless Mobile Mini requests otherwise in writing, the Board of Directors of Mobile Storage Group is required to adopt resolutions generally terminating, effective no later than the day prior to the completion of the merger, any “401(k) plan” sponsored or contributed to by Mobile Storage Group. Mobile Mini will cause any Mobile Mini compensation or benefit plan in which the continuing employees of Mobile Storage Group participate following the completion the merger, to treat, for purposes of vesting and eligibility, service rendered to the Mobile Services Group as service to Mobile Mini and is affiliates, subject to certain exceptions. Each of Mobile Mini and the surviving corporation will cause its medical, dental and other welfare plans in which the continuing employees of Mobile Storage Group or their dependants commence to participate after the completion of the merger to waive certain preexisting condition limitations and take into account certain deductible and out-of-pocket expenses incurred by the continuing employees of Mobile Storage Group and their dependants under similar plans of Mobile Storage Group or any of its subsidiaries. Mobile Mini and its affiliates agree to be solely responsible for satisfying the COBRA health care continuation coverage requirements for certain qualifying individuals who were covered by the health plans of Mobile Storage Group prior to the completion of the merger.
 
Prior to the completion of the merger, Mobile Storage Group will use commercially reasonable efforts to cause those persons who are subject to the rules regarding the Federal excise tax on excess “parachute” payments to waive any payment contingent upon the merger to the extent such payment would be subject to such excise tax. Following the receipt of such waivers, Mobile Storage Group will submit such payments for approval by its stockholders, and provide stockholders with disclosure of such payments.
 
Certain Other Covenants.  The Merger Agreement also contains additional covenants, including covenants relating to the filing of this proxy statement, Mobile Storage Group’s cooperation with Mobile Mini in connection with the debt financing, cooperation and consultation regarding filings and proceedings with governmental and other agencies and organizations and obtaining required consents, cooperation and consultation regarding public statements with respect to transactions contemplated by the Merger Agreement and cooperation with respect to contesting or defending any legal proceedings brought by a third party in connection with the transactions contemplated by the Merger Agreement.
 
Conditions to the Merger
 
Conditions to Each Party’s Obligations.  The respective obligations of each of Mobile Mini and Mobile Storage Group, to effect the merger are conditioned upon the satisfaction or waiver by Mobile Mini and Mobile Storage Group of the following conditions:
 
  •  all applicable waiting periods under HSR will have expired or otherwise been terminated;
 
  •  no provision of any applicable law, judgment, order or injunction making illegal or otherwise prohibiting the consummation of the merger or delaying such consummation beyond August 15, 2008, shall be in effect; and
 
  •  Mobile Mini shall have obtained the approval of the Merger Agreement, the merger and the issuance of the Mobile Mini Preferred Stock to Mobile Storage Group stockholders in connection with the merger by the affirmative vote of the holders of a majority of the outstanding shares of Mobile Mini common stock.
 
Conditions to Obligations of Mobile Mini.  The obligations of Mobile Mini to effect the merger are conditioned upon the satisfaction or waiver by Mobile Mini of the following conditions:
 
  •  the representations and warranties of Mobile Storage Group (i) with respect to authority and enforceability, consents and approvals and no violations, capitalization of Mobile Storage Group and its subsidiaries (other than, with respect to de minimis variations in the number of outstanding shares of Mobile Storage Group common stock) and no material adverse effect and absence of certain changes with respect to Mobile Storage Group, shall be true and correct in all respects on and as of the closing date with the same effect as though


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  such representations and warranties had been made on and as of such date and (ii) all other representations and warranties of Mobile Storage Group contained in the Merger Agreement shall be true and correct (without giving effect to any “materiality,” “material adverse effect” or similar qualifiers contained in any of such representations and warranties) as of the closing date with the same effect as though such representations and warranties had been made on and as of such date (other than those made as of a specified date, which shall be true and correct in all respects as of such specified date), except for such failures to be true and correct that do not have and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Mobile Storage Group;
 
  •  Mobile Storage Group shall have performed in all material respects all of the covenants and agreements required to be performed by it under the Merger Agreement at or prior to the closing date of the merger, and Mobile Mini shall have received a certificate signed on behalf Mobile Storage Group by a senior executive officer of Mobile Storage Group to such effect;
 
  •  since February 22, 2008, there shall have been no events, facts, circumstances, changes or effects, individually or in the aggregate, constituting a material adverse effect on Mobile Storage Group, and Mobile Mini shall have received a certificate signed on behalf of Mobile Storage Group by a senior executive officer of Mobile Storage Group to such effect;
 
  •  the execution and delivery of the Escrow Agreement by Mobile Storage Group;
 
  •  Mobile Mini shall have received the amounts set forth in the Commitment Letter upon the terms and conditions of the Commitment Letter or any alternative financing in accordance with the Merger Agreement;
 
  •  all indebtedness of Mobile Storage Group as of the closing date other than the remaining indebtedness shall be repaid and evidenced by the receipt of pay-off letters in connection with the termination of such indebtedness;
 
  •  the receipt by Mobile Mini of an affidavit from Mobile Storage Group dated the closing date, stating it is not a “United States real property holding corporation”;
 
  •  the receipt by Mobile Mini of copies of the termination agreements relating to certain contracts of Mobile Storage Group with affiliates; and
 
  •  the execution and delivery of the stockholders agreement by WCAS, WCAS Capital Partners IV., L.P. and WCAS Management Corporation.
 
Conditions to Obligations of Mobile Storage Group.  The obligations of Mobile Storage Group to effect the merger are conditioned upon the satisfaction or waiver by Mobile Storage Group of the following conditions:
 
  •  the representations and warranties of Mobile Mini (i) with respect to authority and enforceability, existence and good standing, capitalization of Mobile Mini and its subsidiaries (other than, with respect to de minimis variations in the number of outstanding shares of Mobile Mini common stock), and no material adverse effect with respect to Mobile Mini, shall be true and correct in all respects on and as of the closing date with the same effect as though such representations and warranties had been made on and as of such date and (ii) all other representations and warranties of Mobile Mini contained in the Merger Agreement shall be true and correct (without giving effect to any “materiality,” “material adverse effect” or similar qualifiers contained in any of such representations and warranties) as of the closing date with the same effect as though such representations and warranties had been made on and as of such date (other than those made as of a specified date, which shall be true and correct in all respects as of such specified date), except for such failures to be true and correct that do not have and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Mobile Mini;
 
  •  since February 22, 2008, there shall have been no events, facts, circumstances, changes or effects, individually or in the aggregate, constituting a material adverse effect on Mobile Mini, and Mobile Storage Group shall have received a certificate signed on behalf of Mobile Mini by a senior executive officer of Mobile Mini to such effect;


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  •  Mobile Mini shall have performed in all material respects all of the covenants and agreements required to be performed by it under the Merger Agreement at or prior to the closing date of the merger, and Mobile Storage Group shall have received a certificate signed on behalf Mobile Mini by a senior executive officer of Mobile Mini to such effect; and
 
  •  the execution and delivery of the stockholders agreement by Mobile Mini.
 
Indemnification
 
Mobile Storage Group’s stockholders have agreed to hold Mobile Mini and its affiliates, successors and assigns harmless on an after tax basis (taking into account benefits arising from the loss) for any losses which arise from or in connection with any breach by Mobile Storage Group or any of Mobile Storage Group’s stockholders of any of their representations, warranties or covenants under the Merger Agreement or in any ancillary agreement or in any instrument, certificate or writing delivered pursuant to the Merger Agreement. Mobile Mini has agreed to hold harmless Mobile Storage Group’s stockholders and their affiliates on an after-tax basis (taking into account benefits arising from any loss) for any breach by Mobile Mini of any of its representations, warranties or covenants under the Merger Agreement or in any instrument, certificate or writing delivered pursuant to the Merger Agreement.
 
The obligations to indemnify and hold harmless for breaches of representations and warranties pursuant to the Merger Agreement shall survive until the date that is 12 months after the consummation of the merger, except for claims for indemnification asserted prior to the end of such period, which claims shall survive until final resolution thereof. The maximum amount of Mobile Mini’s and Mobile Storage Group’s indemnification liabilities under the Merger Agreement is $30 million each. Indemnification claims may be asserted only if each individual indemnifiable loss exceeds $50,000 and until the total amount of losses exceeds $3 million; provided, that to the extent the amount of indemnifiable losses exceeds the $3 million, the indemnified party shall be entitled to recover the entire amount of losses in excess of $1.5 million. For purposes of determining whether an individual loss exceeds $50,000, all losses based on claims or a series of related claims arising out of similar facts or circumstances shall be aggregated.
 
All claims for indemnification by Mobile Mini shall first be satisfied from the escrow amount and once the escrow amount has been paid to satisfy Mobile Mini’s indemnification claims or released to Mobile Storage Group’s stockholders pursuant to the escrow agreement, Mobile Mini shall be entitled to pursue all claims for indemnification directly against Mobile Storage Group’s stockholders in accordance with the joinder agreement or letters of transmittal, as the case may be. Except as otherwise provided in the joinder agreement, the indemnification obligations of Mobile Storage Group’s stockholders are several and not joint.
 
All claims for indemnification by Mobile Storage Group’s stockholders as finally determined pursuant to the Merger Agreement, shall be paid by Mobile Mini to such Mobile Storage Group’s stockholders by wire transfer in immediately available funds to the bank accounts designated by such Mobile Storage Group’s stockholders in a notice to Mobile Mini not less than two business days prior to such payment.
 
Release of Amounts in Escrow.  Subject to the terms of the Merger Agreement, (i) if the cash in escrow exceeds the amount of an indemnification claim by Mobile Mini, then the escrow agent shall release an amount in cash equal to such claim to Mobile Mini; (ii) if the claim exceeds the cash in escrow but is less than the aggregate Fair Market Value of the preferred stock plus the cash then held in escrow, then the escrow agent shall release the entire balance of the cash then held in escrow plus a number of shares of preferred stock equal to the amount by which Mobile Mini’s indemnification claim exceeds the cash balance in escrow divided by the Fair Market Value; or (iii) if Mobile Mini’s claim exceeds the aggregate Fair Market Value of preferred stock plus the cash then held in escrow, then the stockholders of Mobile Storage Group shall, at their option (x) return to Mobile Mini a number of shares of preferred stock of Mobile Mini equal to such excess divided by the Fair Market Value per share of the preferred stock, or (y) pay to Mobile Mini in accordance with the joinder agreement or the applicable letter of transmittal, as the case may be, such excess in cash.
 
“Fair Market Value” means, for purposes of valuing Mobile Mini’s preferred stock under the indemnification provisions of the Merger Agreement, the as-converted value of Mobile Mini’s preferred stock based on the average of the closing prices of Mobile Mini’s common stock on the NASDAQ reporting system or on the principal


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exchange on which Mobile Mini’s common stock is traded (as reported in the Wall Street Journal) over a period of 30 days consisting of the day the final amount of indemnifiable losses has been agreed to or otherwise determined pursuant to the provisions of the Merger Agreement and the 29 consecutive trading days prior to such day the final amount of indemnifiable losses has been agreed or otherwise determined pursuant to the provisions of the Merger Agreement; provided, that if Mobile Mini’s common stock is not traded on any exchange or the over-the-counter market, then “Market Price” shall be determined in good faith by Mobile Mini and WCAS.
 
Insurance Policies.  The amount of losses payable pursuant to the indemnification provision of the Merger Agreement shall be reduced by any amounts actually received under applicable insurance policies or from any other person alleged to be responsible for such losses.
 
Termination
 
The Merger Agreement may be terminated at any time before the completion of the merger, in any of the following circumstances:
 
  •  by mutual written consent of Mobile Mini and Mobile Storage Group;
 
  •  by either Mobile Mini or Mobile Storage Group, if
 
  •  the merger does not occur on or before August 15, 2008, provided that the right to terminate the Merger Agreement shall not be available to either Mobile Mini or Mobile Storage Group, as the case may be, if its failure to fulfill any obligation under the Merger Agreement shall be the cause of the failure of the closing to occur on or before such date;
 
  •  there has been a breach of any representations and warranties or any covenant to be performed by either Mobile Mini or Mobile Storage Group in a manner such that the closing conditions described in “— Conditions to Each Party’s Obligations” and “— Conditions to Obligations of Mobile Mini” or “— Conditions to Obligations of Mobile Storage Group” or, as the case may be, would not be satisfied, provided that any such breach of a representation or warranty or a covenant has not been cured within 10 business days following receipt by the breaching party of written notice of such breach;
 
  •  there shall be any law making illegal or otherwise prohibiting the consummation of the merger or any order of any competent authority prohibiting such transactions, which has been entered and become final and non-appealable; or
 
  •  the approval of the Merger Agreement, the merger and the issuance of the Mobile Mini preferred stock to Mobile Storage Group stockholders in connection with the merger by the affirmative vote of the holders of a majority of the outstanding shares of Mobile Mini common stock are not obtained.
 
Termination Fees and Expenses
 
If the Merger Agreement is terminated:
 
  •  by either Mobile Mini or Mobile Storage Group because the Mobile Mini stockholders failed to approve of the Merger Agreement, the merger and the issuance of the preferred stock to the stockholders of Mobile Storage Group and at the time of such termination (i) neither Mobile Storage Group nor its stockholders have breached any of their representations, warranties, covenants and agreements contained in the Merger Agreement, other than the failure of any condition to Mobile Storage Group’s closing under the Merger Agreement caused by Mobile Mini’s breach of its obligations thereunder, (ii) all of the conditions to Mobile Storage Group’s obligations to consummate the merger have been satisfied or would be capable of being satisfied at or prior to the effective time of the merger assuming the effective time of the merger were to occur at any time up to and including August 15, 2008, and (iii) there exists at any time prior to the special meeting a bona-fide acquisition proposal to acquire all or substantially all of the common stock or assets of Mobile Mini then within 3 business days of the date of such termination Mobile Mini shall reimburse Mobile Storage Group for up to $3 million of its reasonable, documented out-of-pocket costs and expenses of Mobile Storage Group incurred in connection with the negotiation and execution of the Merger Agreement and the evaluation of the merger.


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Effect of Termination
 
If the Merger Agreement is terminated in accordance therewith, upon written notice, the Merger Agreement shall be terminated, without any liability (other than liability for any willful breach) on the part of Mobile Mini or Mobile Storage Group; provided, that the provisions of the Merger Agreement relating to public announcements, termination, effects of termination, expenses and transfer taxes, governing law and jurisdiction will survive any termination thereof.
 
Specific Performance
 
Each of Mobile Mini and Mobile Storage Group are entitled to an injunction or injunctions to prevent actual breaches of the Merger Agreement by the other party and to enforce specifically the terms and provisions of the Merger Agreement.
 
Amendments
 
The Merger Agreement may not be changed, and any of the terms, covenants, representations, warranties and conditions cannot be waived, except pursuant to an instrument in writing signed by Mobile Mini and Mobile Storage Group or, in the case of a waiver, by the party waiving compliance.


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THE JOINDER AGREEMENT
 
The following summary describes the material provisions of the joinder agreement to the Merger Agreement by and among Mobile Mini and certain stockholders of Mobile Storage Group. This summary may not contain all of the information about the joinder agreement that is important to you and is qualified in its entirety by reference to the joinder agreement, which is included as Exhibit A to Annex A, and is incorporated by reference into this proxy statement. We encourage you to read the joinder agreement carefully.
 
Joinder to the Merger Agreement.  Concurrently with the execution of the Merger Agreement, Mobile Mini, Cactus Merger Sub and Mobile Storage Group have entered into a joinder agreement with each of WCAS, WCAS Capital Partners IV, L.P., WCAS Management Corporation and De Nicola Holdings, L.P. Among other things, each such stockholder of Mobile Storage Group has agreed to be bound by all provisions in the Merger Agreement that provide for any liability or obligation of any stockholders of Mobile Storage Group. At the closing, all other stockholders of Mobile Storage Group will be required to execute and deliver a letter of transmittal which, among other things, will contain the relevant provisions of the joinder agreement described below (including the indemnification obligations but excluding the non-competition and non-solicitation covenants) prior to receiving their respective pro rata portions of the Merger Consideration.
 
Indemnification Obligations and Limitations.  Each stockholder shall be liable under the indemnification obligation set forth in the Merger Agreement on a several basis and each such stockholder shall be responsible for its pro rata portion of any losses and in each case (other than WCAS) limited to its respective Pro Rata Cap.
 
The indemnification obligation of WCAS shall be limited to an aggregate amount equal to the greater of its Pro Rata Cap, or $15 million plus the amount (including preferred stock of Mobile Mini valued at $18.00 per share), if any, paid from the escrow indemnification amount to satisfy any purchase price adjustment in favor of Mobile Mini. Any amount in excess of WCAS’s Pro Rata Cap shall be available only to the extent that Mobile Mini is unsuccessful after using all commercially reasonable efforts to collect from the other stockholders of Mobile Storage Group.
 
“Pro Rata Cap” shall mean, with respect to each stockholder of Mobile Storage Group, the product of such stockholder’s pro rata portion multiplied by $15 million, plus the amount (including preferred stock of Mobile Mini valued at $18.00 per share), if any, paid from the escrow indemnification amount to satisfy any purchase price adjustment in favor of Mobile Mini under the Merger Agreement.
 
Mobile Mini Rights Agreement.  Mobile Mini’s execution of the Merger Agreement shall constitute “Prior Written Approval of the Company” (as defined under that certain rights agreement, dated as of December 9, 1999, between Mobile Mini and Norwest Bank Minnesota, N.A.) solely with respect to the Mobile Storage Group stockholders and WCAS’s acquisition of the preferred stock of Mobile Mini (and the conversion into common stock in respect thereof) in connection with the merger.
 
Representations and Warranties.  The joinder agreement contains representations and warranties made by each stockholder signatory of the joinder agreement to Mobile Mini relating to a number of matters including: authority and enforceability; consents and approvals and no violations; existence and good standing; title to shares of Mobile Storage Group common stock; understanding of agreements and non-reliance; accredited investor and qualified purchaser; investment for own account; and restrictions on Mobile Mini preferred stock.
 
Non-Competition and Non-Solicitation.  During the period commencing at the effective time of the merger and ending on the date that is one year after the WCAS Directorship Term End Date, each stockholder signatory of the joinder agreement and its controlled affiliates will not, within any jurisdiction within any marketing area in which Mobile Mini is doing a substantial amount of business, directly or indirectly own any interest in, manage, operate, control, be employed by or participate in the ownership, management, operation or control of, or in any manner engage in, any competitive business.


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Each stockholder of Mobile Storage Group signatory of the joinder agreement agrees, during such non-competition restricted period, to, and to cause its controlled affiliates to, refrain from:
 
  •  soliciting or encouraging any individual who is an employee of Mobile Mini in the position of “branch manager” or higher as of WCAS Directorship Term End Date, to terminate his or her employment relationship with Mobile Mini;
 
  •  soliciting, hiring or retaining any individual who is an employee of Mobile Mini in the position of “branch manager” or higher as of the WCAS Directorship Term End Date to become an employee of, or provide services to, any person other than Mobile Mini or any of its subsidiaries; or
 
  •  soliciting business for the benefit of any competitive business from any person that is a customer of Mobile Mini that accounts for at least $500,000 of Mobile Mini’s gross revenues (on a consolidated basis) for the applicable fiscal year.
 
Nothing shall preclude generalized searches for employees, any solicitation or hiring of any employee who has been terminated by Mobile Mini at least 6 months prior to such solicitation or hiring, and any hiring of any employee of the Mobile Mini who approaches such stockholder signatory of the joinder agreement on his or her own volition.
 
“WCAS Directorship Term End Date” means the date on which WCAS ceases to hold, in the aggregate, at least 2,000,000 shares of preferred stock or common stock issued upon conversion or exchange of the preferred stock.
 
Certain Other Agreements.  Each stockholder of Mobile Storage Group who signed the joinder agreement has also agreed to (i) waive any and all appraisal rights under applicable law, (ii) the appointment of WCAS as stockholder representative, and (iii) the termination of that certain stockholders agreement by and among Mobile Storage Group and its stockholders, dated August 1, 2006 and that certain management services agreement, dated as of August 1, 2006, among the Mobile Storage Group, WCAS Management Corporation and Mobile Services Group, Inc. effective as of the effective time of the merger.


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THE STOCKHOLDERS AGREEMENT
 
The following summary describes the material provisions of the stockholders agreement to be entered into by and among Mobile Mini and certain stockholders of Mobile Storage Group upon completion of the merger. This summary may not contain all of the information about the stockholders agreement that is important to you and is qualified in its entirety by reference to the stockholders agreement, which is included as Exhibit C to Annex A, and is incorporated by reference into this proxy statement. We encourage you to read the stockholders agreement carefully
 
Transfer of Equity Securities
 
Transfer Restrictions.  No Mobile Storage Group stockholder party to the stockholders agreement shall, voluntarily or involuntarily, directly or indirectly, transfer in any manner, any equity or debt securities of Mobile Mini, in whole or in part, or any other right or interest therein, or enter into any transaction which results in the economic equivalent of a transfer to any person except pursuant to a permitted transfer. Any attempt to transfer any security in violation of the transfer restrictions shall be null and void and Mobile Mini will not permit or give any effect to any such transfer to be made on its books and records.
 
Permitted Transfers.  A Mobile Storage Group stockholder party to the stockholders agreement may carry out any of the following transfers:
 
  •  any transfer following such stockholder’s death, to such stockholder’s legal representative, heir or legatee, or any gift during such stockholder’s lifetime to such stockholder’s spouse, children, grandchildren or to a trust or other legal entity for the exclusive benefit of such stockholder or any one or more of the foregoing;
 
  •  any transfer to any affiliate of such stockholder (as long as the permitted transferee agrees in writing to be bound by all the provisions of the stockholders agreement); provided that such affiliate is not a competitor of Mobile Mini or an adverse party in any material legal proceeding with Mobile Mini; provided further that any such affiliate shall transfer such securities to such stockholder from whom the securities were originally received or acquired within 5 calendar days after ceasing to be an affiliate of such stockholder; and
 
  •  any transfer, occurring on or after the first anniversary of the closing date; provided, that private sales of common stock of Mobile Mini or sales of preferred stock to any single transferee shall not exceed 3% of the fully diluted common stock of Mobile Mini; and provided, further, that such transferee is not a competitor of Mobile Mini or an adverse party in any material legal proceeding with Mobile Mini.
 
In the event of permitted transfers of preferred stock of Mobile Mini, in addition to the foregoing, the aggregate number of permitted transferees in connection with transfers by any single stockholder party to the stockholders agreement (other than WCAS, Lehman and California State Teachers’ Retirement System) shall not exceed 1 person, and transfers by WCAS, Lehman and the California State Teachers’ Retirement System shall not exceed 5, 2 and 2 persons, respectively. Prior to any permitted transfers of preferred stock of Mobile Mini, each transferee shall agree in writing not to transfer pursuant to a private sale any preferred stock to a competitor of Mobile Mini or an adverse party in any material legal proceeding with Mobile Mini.
 
Customary Black-out Periods.  Subject to certain exceptions, at all times during which WCAS has the right to nominate a director, neither WCAS nor any of its controlled affiliates shall sell any securities other than during any period when the directors and officers of WCAS and its subsidiaries are not prohibited from selling securities pursuant to the written policies and procedures of Mobile Mini governing transfers of securities by such officers and directors as may be in effect from time to time.
 
Standstill.  Subject to certain exceptions for pooled investment vehicles managed or under the control of WCAS or any of its affiliates that primarily invest on a passive basis in debt securities or debt instruments, or any trust or other investment vehicle formed for the benefit of individuals or charitable concerns, such as publicly traded mutual funds and blind trusts, for the period commencing on the closing date and ending on the date on which WCAS, and each permitted transferee of WCAS as the case may be, in the aggregate, no longer hold equity securities constituting (or representing upon the conversion thereof) 5% or more of the outstanding shares of


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common stock of Mobile Mini, WCAS, and each permitted transferee of WCAS as the case may be, shall, and shall cause their controlled affiliates to, refrain from directly or indirectly:
 
  •  acquiring, announcing an intention to acquire, offering or proposing to acquire, soliciting an offer to sell or agree to acquire, or entering into any arrangement or undertaking to acquire, directly or indirectly, by purchase, or otherwise, record or direct or indirect beneficial ownership interest in any equity or debt securities of Mobile Mini or any assets (other than purchases of assets in the ordinary course of business) or other securities of Mobile Mini or any of its subsidiaries;
 
  •  making, effecting, initiating, curing or participating in any take-over bid, tender offer, exchange offer, merger, consolidation, business combination, recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction involving Mobile Mini or any of its subsidiaries;
 
  •  soliciting, making, effecting, initiating, causing, or participating in any way in, directly or indirectly, any solicitation of proxies or consents from any holders of any securities of the Mobile Mini or any of its subsidiaries or calling or seeking to have called any meeting of stockholders of the Mobile Mini or any of its subsidiaries;
 
  •  forming, joining or participating in, or otherwise encouraging the formation of, any “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, or the Exchange Act) with respect to any securities that are not equity securities (other than the preferred stock of Mobile Mini and common stock of Mobile Mini issued upon conversion thereof) and debt securities of Mobile Mini or any of its subsidiaries;
 
  •  arranging, facilitating, or in any way participating, directly or indirectly, in any financing for the purchase of any securities or assets of Mobile Mini or any of its subsidiaries that are not equity securities (other than the preferred stock of Mobile Mini and common stock of Mobile Mini issued upon conversion thereof) and debt securities of Mobile Mini or any of its subsidiaries;
 
  •  acting, directly or indirectly, to seek control or direct the Board of Directors, stockholders, policies or affairs of Mobile Mini or any of its subsidiaries; soliciting, proposing, seeking to effect or negotiating with any other person with respect to any form of business combination transaction involving Mobile Mini or other extraordinary transaction involving Mobile Mini or any of its subsidiaries; or disclosing an intent, purpose, plan or proposal with respect to Mobile Mini, or any securities or assets of Mobile Mini or any of its subsidiaries that are not equity securities (other than the preferred stock of Mobile Mini and common stock of Mobile Mini issued upon conversion thereof) and debt securities of Mobile Mini or any of its subsidiaries;
 
  •  taking any action that is intended to or reasonably expected to require Mobile Mini or any of its subsidiaries to make a public announcement of any of the types of the foregoing matters;
 
  •  agreeing or offering to take, or encouraging or proposing (publicly or privately) the taking of, or announcing an intention to take, or otherwise making any public announcement with respect to any of the foregoing actions;
 
  •  requesting of, or proposing to Mobile Mini, or any of its representatives that Mobile Mini amend or waive or consider the amendment or waiver of any term of the foregoing standstill provisions.
 
Notwithstanding the foregoing, in the event WCAS has not acquired up to 2.0 million shares of Mobile Mini common stock under the waiver of standstill provision of the Merger Agreement (see “— Waiver of the Standstill”, beginning on page 45 hereof), WCAS shall continue to be permitted to purchase up to 2.0 million shares of Mobile Mini common stock under such provision of the Merger Agreement.
 
Registration Rights
 
Shelf Registration Statement.  Mobile Mini shall use all commercially reasonable efforts to file a shelf registration statement under the U.S. Securities Act of 1933, as amended, or Securities Act on or about the date that is the 10-month anniversary of the closing date covering all of the shares of Mobile Mini common stock issuable upon conversion of the preferred stock and shares of Mobile Mini common stock acquired pursuant to the Merger


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Agreement as described in “— Waiver of Standstill”, beginning on page 45 (hereinafter the “registrable securities”) then held by the Mobile Storage Group stockholders party to the stockholders agreement on Form S-3 to enable the resale of such registrable securities after the first anniversary of the closing date on a delayed or continuous basis.
 
Required Registrations.  At any time after the date, if any, that (x) Mobile Mini is not permitted to file or maintain a Form S-3 in connection with the shelf registration in accordance with the terms of the stockholders agreement, or (y) the shelf registration expired in accordance with the terms of the stockholders agreement and not all registrable securities registered in such shelf registration have been sold, the holders of registrable securities representing at least a majority of the outstanding registrable securities shall have the right to request Mobile Mini to effect a registration under the Securities Act of registrable securities held by such stockholders. Mobile Mini shall not be required to comply with more than 1 such demand request during any 6 month period and shall only be obligated to comply with 4 demand requests in total.
 
Incidental Registration.  If, at any time after the first anniversary of the closing date, Mobile Mini proposes to register any of its securities under the Securities Act for sale to the public, any Mobile Storage Group stockholder party to the stockholders agreement shall have the right at each such time to include registrable securities held by it that are not otherwise covered by the shelf registration statement or a required registration statement in such registration statement subject to any underwriters’ customary cut back.
 
Distribution Black-Out Period.  Subject to certain exceptions and limitations if the Board of Directors of Mobile Mini reasonably determines that the registration and distribution of registrable securities (i) would reasonably be expected to impede, delay or interfere with, or require premature disclosure of, any material financing, offering, acquisition, merger, corporate reorganization, segment reclassification or discontinuation of operations, or other significant transaction or any negotiations, discussions or pending proposals with respect thereto, involving the Mobile Mini or any of its subsidiaries, or (ii) would require disclosure of non-public material information, the disclosure of which would reasonably be expected to adversely affect Mobile Mini, Mobile Mini shall be entitled to postpone the filing or effectiveness or suspend the effectiveness of a registration statement and/or the use of any prospectus for a period of time not to exceed 60 days. Mobile Mini shall promptly give the stockholders party to the stockholders agreement written notice of such postponement or suspension (which notice need not specify the nature of the event giving rise to such suspension); provided, that Mobile Mini shall not utilize this deferral right more than once in any 6 month period and provided further that Mobile Mini may extend such period to be up to 90 days in the aggregate, but if it elects to do so it shall not be permitted to impose a subsequent black-out period until a time that is more than 6 months after the end of such black-out period.
 
Registration Expenses.  Mobile Mini will pay all registration expenses in connection with each registration of securities pursuant to the stockholders agreement, including, without limitation, any such registration not effected by Mobile Mini, except for any incremental registration expenses incurred by Mobile Mini in connection with the registration of any shares of common stock acquired by WCAS after the filing of the proxy statement in accordance with the Merger Agreement, as described in “— Waiver of the Standstill”, beginning on page 45.
 
Holdback Agreements.  The Mobile Storage Group stockholders party to the stockholders agreement (and Mobile Mini and its executive officers if requested by the underwriters) shall not sell, make any short sale of, grant any option for the purchase of, or otherwise dispose of any securities, other than those securities included in a registration described above for the 7 days prior to and the 90 days after the effectiveness of the registration statement pursuant to which such offering shall be made (or such longer periods as may be advised by the underwriter).
 
Board of Directors of Mobile Mini
 
Composition.  At the effective time, Mobile Mini shall expand the size of the Board of Directors of Mobile Mini so that the number of members on the Board of Directors of Mobile Mini is equal to 8 and shall appoint (i) one individual designated by WCAS, whose term ends in [2010][2011] and (ii) another individual designated by WCAS, whose term ends in 2009. The individuals nominated by WCAS must satisfy the requirements of the nominating and corporate governance committee of the Board of Directors of Mobile Mini and will hold such seat until the next annual meeting of Mobile Mini at which such seat is up for re-election. WCAS has designated


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Mr. Sanjay Swani and Mr. Michael E. Donovan, respectively, to fill the seat of the WCAS directors mentioned above.
 
Each time the applicable class of directors comes ups for re-election, until the WCAS Directorship Term End Date, the Board of Directors of Mobile Mini shall nominate for election and recommend that the stockholders of Mobile Mini elect to the Board of Directors of Mobile Mini one individual selected by WCAS to fill the seat that Mr. Sanjay Swani will hold upon the consummation of the merger.
 
Board Observation Rights.  From and after January 1, 2010, until the WCAS Directorship Term End Date, WCAS shall be entitled to designate 1 observer to attend, as a non-voting observer, all meetings (including participation in telephonic meetings) of the Board of Directors of Mobile Mini subject to the limitations set forth on the stockholders agreement.
 
Transfer of preferred stock by WCAS.  WCAS’s rights to designate a permanent director, a temporary director, or an observer shall immediately terminate and expire on the WCAS Directorship Term End Date.


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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
 
The following Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2007 and the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2007 are based upon the historical consolidated financial statements of Mobile Storage Group included in this proxy statement and on the historical consolidated financial statements of Mobile Mini, which are incorporated by reference into this proxy statement, giving effect to the merger and other transactions that will be effective upon completion of the merger.
 
The Unaudited Pro Forma Condensed Combined Statement of Operations gives effect to the merger as if it had occurred on January 1, 2007 and the Unaudited Pro Forma Condensed Combined Balance sheet gives effect to the merger as if it had occurred on December 31, 2007. The two major categories of adjustments reflected in the Unaudited Pro Forma Condensed Combined Financial Statements are “Purchase Accounting Adjustments” and “Other Merger Adjustments”.
 
Purchase Accounting Adjustments
 
Purchase accounting adjustments include adjustments necessary to allocate the purchase price to the tangible and intangible assets and liabilities of Mobile Storage Group based on their estimated fair values. A detailed description of each of these purchase accounting adjustments follows:
 
Fair Market Value Adjustments — The pro forma financial statements reflect the purchase price allocation based on a preliminary assessment of fair market values and lives assigned to the assets, liabilities and leases being acquired. Fair market values in the pro forma financial statements were determined based on preliminary discussion with independent valuation consultants, industry trends and by reference to market rates and transactions. After the closing of the merger, Mobile Mini, with the assistance of valuation consultants, will complete its evaluation of the fair value and the lives of the assets, liabilities and leases acquired. Fair market value adjustments reflected in the pro forma financial statements may be subject to significant revisions and adjustments pending finalization of those valuation studies. Significant assets and liabilities adjusted to fair market value which are subject to finalization of valuation studies include lease fleet, property and equipment, customer lists and other intangibles, operating leases, deferred revenue and continuing debt obligations of Mobile Mini.
 
Purchase Price Allocation — The value of the merger consideration was determined based on the deemed fair value (assumed to be liquidation value and could change significantly upon closing) of shares of Mobile Mini’s preferred stock to be issued upon the closing of the transaction, cash consideration to be paid to shareholders of Mobile Storage Group, the fair value of liabilities to be assumed, and direct acquisition costs Mobile Mini expects to incur in connection with the merger. The following table summarizes the estimated purchase price (dollars in millions):
 
         
Fair value of shares of Mobile Mini preferred stock issued to Mobile Storage Group shareholders
  $ 154.0  
Cash consideration paid to Mobile Storage Group shareholders
    12.5  
Assumption of debt
    535.0  
         
Total purchase value
  $ 701.5  
         


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The following table summarizes the pro forma net assets acquired and liabilities assumed in connection with the merger and the preliminary allocation of the purchase price (dollars in millions):
 
         
Current assets
  $ 51.4  
Lease fleet
    284.4  
Property plant and equipment, net
    25.6  
Other assets, including other intangibles
    87.4  
Goodwill
    371.0  
Liabilities assumed, less debt assumed
    (118.3 )
         
Total purchase price
  $ 701.5  
         
 
Income Taxes — Upon completion of the merger, Mobile Mini will evaluate whether there is any reduction necessary of its deferred tax asset valuation allowance. Any such reduction in the valuation allowance would be recorded as a decrease to goodwill. Due to the change in ownership upon completion of the merger, the annual usage of any attributes that were generated prior to the merger may be substantially limited.
 
The historical financial statements of Mobile Storage Group reflect other reclassifications of certain balances to conform with Mobile Mini’s financial statement presentation.
 
Amendment of Credit Facility
 
In order to finance Mobile Mini’s merger with Mobile Storage Group and to provide the combined company with financing for its continuing operations, it will enter into a new $1 billion revolving credit facility that will be effective either before or upon completion of the merger. The Unaudited Pro Forma Condensed Combined Statements of Operations give effect to this material agreement as if it occurred on January 1, 2007 and the unaudited pro forma condensed combined balance sheet gives effect to the material agreement as if it occurred on December 31, 2007.
 
The pro forma adjustments reflect an initial line of credit draw of $603.0 million immediately available upon closing of the merger, which amounts were used as follows (in millions):
 
         
    Pro forma  
 
Refinance Mobile Mini’s line of credit
  $ 237.9  
Repayment of Mobile Storage Group’s line of credit
    218.7  
Payment of Mobile Storage Group’s senior subordinated notes plus accrued interest
    109.4  
Payment to Mobile Storage Group’s shareholders
    12.5  
         
      578.5  
Transaction fee for credit facility
    15.0  
Other transaction costs
    9.5  
         
    $ 603.0  
         
 
Other Merger Discussions
 
The Unaudited Pro Forma Condensed Combined Financial Statements are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Mobile Mini would have been had the business combination with Mobile Storage Group occurred on the respective date assumed, nor are they necessarily indicative of future consolidated operating results or the future consolidated financial position of Mobile Mini.
 
The Unaudited Pro Forma Condensed Combined Financial Statements do not reflect anticipated benefits derived from combined synergies, operating efficiencies and cost savings that are expected to result from the acquisition in the first full year of operations following the merger, nor any benefits to be derived from the combined company’s growth projects nor any changes in leasing yield subsequent to the date of such Unaudited Pro Forma


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Condensed Combined Financial Statements. The statements also do not include the anticipated integration costs that Mobile Mini expects to incur after the completion of the merger.
 
Mobile Mini believes that cost savings will be realized upon the consolidation and integration of the companies. Mobile Mini is in the process of developing formal plans for combining the operations. In addition to the pro forma adjustments, additional liabilities may be incurred in connection with the business combination and ultimate reorganization. These additional liabilities and costs have not been fully reflected in the Unaudited Pro Forma Condensed Combined Financial Statements because information necessary to reasonably estimate all costs and to formulate detailed restructuring plans is not available. Accordingly, the allocation of the purchase price cannot be estimated with a reasonable degree of accuracy and may differ materially from the amounts assumed in the Unaudited Pro Forma Condensed Combined Financial Statements.
 
As shown in the adjustments below, Mobile Mini expects the accounting for the acquisition of Mobile Storage Group to result in a significant amount of goodwill. We have not adjusted Mobile Storage Group’s historical amount of identifiable intangible assets associated with customer lists, customer relations and trade names. The valuation study of these intangible assets has not been completed. Upon the final reports of this valuation, goodwill and other assets and intangibles will be further adjusted to reflect the valuation results.
 
The Unaudited Pro Forma Condensed Combined Financial Statements should be read in conjunction with the separate historical consolidated financial statements and accompanying notes of Mobile Mini incorporated by reference into this proxy statement and the separate historical consolidated financial statements and accompanying notes of Mobile Storage Group included in this proxy statement. See “Where You Can Find More Information” on page 94.


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Unaudited Pro Forma Condensed Combined Statement of Operations
For The Year Ended December 31, 2007
(In thousands, except per share amounts)
 
                                         
          Mobile
                   
    Mobile
    Storage
    Purchase
    Other
       
    Mini
    Group
    Accounting
    Merger
    Pro Forma
 
    Historical     Historical     Adjustments     Adjustments     As Adjusted  
 
Revenues:
                                       
Leasing
  $ 284,638     $ 192,318     $     $     $ 476,956  
Sales
    31,644       40,809                   72,453  
Other
    2,020                         2,020  
                                         
Total revenues
    318,302       233,127                   551,429  
                                         
Costs and expenses:
                                       
Cost of sales
    21,651       28,784                   50,435  
Trucking and yard costs
          58,833       (58,833 )(N)            
Leasing, selling and general expenses
    166,994       67,307       62,001 (N)           296,302  
Stock related compensation
          3,168       (3,168 )(N)            
Depreciation and amortization
    21,149       22,216             (558 )(P)     42,807  
                                         
Total costs and expenses
    209,794       180,308             (558 )     389,544  
                                         
Income from operations
    108,508       52,819             558       161,885  
Other income (expense):
                                       
Other income (expense)
    101       (141 )                 (40 )
Interest expense
    (24,906 )     (51,218 )           7,508 (Q)     (68,616 )
Debt restructuring/extinguishment expense
    (11,224 )                       (11,224 )
Foreign currency exchange gain
    107       714                   821  
                                         
Income for continuing operations before provision for income taxes
    72,586       2,174             8,066       82,826  
Provision (benefit) for income taxes
    28,410       (1,618 )           3,105 (R)     29,897  
                                         
Net income from continuing operations
    44,176       3,792             4,961       52,929  
Income (loss) from discontinued operations, net of tax provision (benefit)
          (1,110 )     1,110 (O)            
                                         
Net income
  $ 44,176     $ 2,682     $ 1,110     $ 4,961     $ 52,929  
                                         
Earnings per share:
                                       
Basic
  $ 1.24     $     $     $     $ 1.20 (U)
                                         
Diluted
  $ 1.22     $     $     $     $ 1.18 (U)
                                         
Weighted average number of common and common share equivalents outstanding:
                                       
Basic
    35,489                   8,555 (S)     44,044  
                                         
Diluted
    36,296                   8,555 (S)     44,851  
                                         


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Unaudited Pro Forma Condensed Combined Balance Sheet
December 31, 2007
(In thousands)
 
                                                 
          Mobile
                         
    Mobile
    Storage
          Purchase
    Other
       
    Mini
    Group
    Financial
    Accounting
    Merger
    Pro Forma
 
    Historical     Historical     Reclassifications     Adjustments     Adjustments     As Adjusted  
 
Assets:
                                               
Cash
  $ 3,703     $ 2,331     $     $     $     $ 6,034  
Receivables, net
    37,221       34,595                         71,816  
Inventories
    29,431       14,492                         43,923  
Lease fleet, net
    802,923       344,415             (60,045 )(B)           1,087,293  
Property, plant and equipment, net
    55,363       29,077             (3,500 )(C)           80,940  
Deposits and prepaid expenses
    11,334       7,648                         18,982  
Other assets and intangibles, net
    9,086       76,402       13,175 (A)     (9,855 )(D)     15,000 (K)     103,808  
Deferred financial costs
          13,111       (13,111 )(A)                  
Assets held for sale
          64       (64 )(A)                  
Goodwill
    79,790       313,885             57,110 (M)     9,475 (M)     460,260  
                                                 
Total assets
  $ 1,028,851     $ 836,020     $     $ (16,290 )   $ 24,475     $ 1,873,056  
                                                 
                                                 
Liabilities:
                                               
Accounts payable
  $ 20,560     $ 13,911     $     $     $     $ 34,471  
Accrued liabilities
    38,941       28,945       6,420 (A)     21,413 (E)           95,719  
Customer deposits
          6,420       (6,420 )(A)                  
Line of credit
    237,857       218,737             121,900 (F)     24,475 (L)     602,969  
Notes payable
    743       946                         1,689  
Obligations under capital leases
    10       6,657                         6,667  
Senior notes, net
    149,379       200,000             (16,000 )(G)           333,379  
Senior subordinated notes, net
          96,014             (96,014 )(H)            
Deferred income taxes
    123,471       62,811                         186,282  
                                                 
Total liabilities
    570,961       634,441             31,299       24,475       1,261,176  
                                                 
Commitments and contingencies
                                               
                                                 
Convertible preferred stock
                      153,990 (I)           153,990  
                                                 
Stockholders’ equity:
                                               
Common stock
    367       190,741             (190,741 )(J)           367  
Additional paid-in capital
    278,593                                 278,593  
Retained earnings
    213,894       4,982             (4,982 )(J)           213,894  
Accumulated other comprehensive income
    4,336       5,856             (5,856 )(J)           4,336  
Treasury stock
    (39,300 )                             (39,300 )
                                                 
Total stockholders’ equity
    457,890       201,579             (201,579 )           457,890  
                                                 
Total liabilities and stockholders’ equity
  $ 1,028,851     $ 836,020     $     $ (16,290 )   $ 24,475     $ 1,873,056  
                                                 
                                                 
Weighted average number of                                                
common and common share
                                               
equivalents outstanding:
                                               
Basic
    35,489                         8,555(S )     44,044  
                                                 
Diluted
    36,296                         8,555(S )     44,851  
                                                 
Book value per weighted average
                                               
common and common share
                                               
equivalents outstanding:
                                               
Basic
  $ 12.90                             $ 13.89 (T)
                                                 
Diluted
  $ 12.62                             $ 13.64 (T)
                                                 


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Notes to Unaudited Pro Forma Condensed Combined Financial Statements
 
1.   Basis of Presentation
 
The Unaudited Pro Forma Condensed Combined Financial Statements, which have been prepared by Mobile Mini management, have been derived from historical consolidated financial statements of Mobile Mini, incorporated by reference into this proxy statement and historical consolidated financial statements of Mobile Storage Group included in this proxy statement.
 
Upon completion of the combination with Mobile Storage Group, the pre-combination shareholders of Mobile Mini will own approximately 80.2% of the combined company (80.9% on a fully diluted basis) and the pre-combination shareholders of Mobile Storage Group will own approximately 19.8% of the combined company (19.1% on a fully diluted basis). In addition to considering these relative shareholdings, Mobile Mini management also considered the proposed composition and terms of the Board of Directors of Mobile Mini, the proposed structure and members of the executive management team of Mobile Mini in determining the accounting acquirer. Based on the weight of these factors, Mobile Mini management concluded that Mobile Mini was the accounting acquirer.
 
2.   Pro Forma Assumptions and Adjustments
 
The following assumptions and related pro forma adjustments give effect to the proposed business combination of Mobile Mini and Mobile Storage Group as if such combination occurred on January 1, 2007, in the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2007, and on December 31, 2007, for the Unaudited Pro Forma Condensed Combined Balance Sheet.
 
The Unaudited Pro Forma Condensed Combined Financial Statements are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Mobile Mini would have been had the business combination with Mobile Storage Group occurred on the respective dates assumed, nor are they necessarily indicative of future consolidated operating results or the future consolidated financial position of Mobile Mini.
 
The Unaudited Pro Forma Condensed Combined Financial Statements do not reflect the anticipated benefits derived from combined synergies, operating efficiencies and cost savings that are expected to result from the acquisition following the completion of the merger, nor any benefits to be derived from the combined company’s growth projects nor changes in leasing yield subsequent to the date of such Unaudited Pro Forma Condensed Combined Financial Statements.
 
Mobile Mini believes that cost savings will be realized upon the consolidation and integration of the companies. Mobile Mini is in the process of developing formal plans for combining the operations. We also expect to incur significant integration costs as part of consummating the merger with some expenses incurred at closing and others over a period of time. In addition to the pro forma adjustments, additional liabilities may be incurred in connection with the business combination and ultimate reorganization. These additional liabilities and costs have not been fully reflected in the Unaudited Pro Forma Condensed Combined Financial Statements because information necessary to reasonably estimate all costs and to formulate detailed restructuring plans is not available. Accordingly, the allocation of the purchase price cannot be estimated with a reasonable degree of accuracy and may differ materially from the amounts assumed in the Unaudited Pro Forma Condensed Combined Financial Statements.
 
The Unaudited Pro Forma Condensed Combined Financial Statements include the following pro forma assumptions and adjustments. The final valuation could be materially different than the pro forma adjustment, either positively or negatively.
 
A) This pro forma adjustment is to reclassify certain balances on Mobile Storage Group’s historical consolidated financial statement to conform to Mobile Mini’s presentation. In the Unaudited Pro Forma Condensed Combined Balance Sheet this includes “Deferred financing costs” and “Assets held for sale” which are combined with “Other assets and intangibles, net” and “Customer deposits” is combined with “Accrued liabilities”.


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B) This pro forma adjustment is to reduce the carrying value of the lease fleet to fair market value based on preliminary indications from a third party appraiser and based on the end use by Mobile Mini which differs from Mobile Storage Group, specifically units will be rebranded and locking systems added. This also includes the regulatory sales tax in certain jurisdictions in which we operate where it is required.
 
C) This pro forma adjustment is to reduce the fair values of property, plant and equipment for abandonment of Mobile Storage Group’s land and leasehold improvements and equipment that have no future value to Mobile Mini’s operations.
 
D) This pro forma adjustment is to reduce the values of other assets and intangibles for assets and intangibles that have no future value to Mobile Mini.
 
E) This pro forma adjustment is to (i) increase liabilities for required sales tax on purchased assets in certain jurisdictions, (ii) severance payments to Mobile Storage Group’s personnel, (iii) future lease payments on abandoned Mobile Storage Group’s properties, (iv) Phase I studies and other costs associated with the abandoned properties and (v) other liabilities related to the merger.
 
F) This pro forma adjustment is related to borrowings under a new $1.0 billion revolving facility for the extinguishment of certain debt at face value and accrued interest. The proceeds from borrowings under this credit facility would be used to: (i) pay off certain existing debt obligations of Mobile Storage Group, and (ii) pay $12.5 million to stockholders of Mobile Storage Group as a portion of the purchase price to acquire all outstanding shares of Mobile Storage Group. The following table summarizes this adjustment (in millions):
 
         
    Pro forma  
 
Retirement of Mobile Storage Group’s senior subordinated notes plus accrued interest
  $ 109.4  
Payment to Mobile Storage Group’s stockholders
    12.5  
         
    $ 121.9  
         
 
G) This pro forma adjustment is to reduce the value of Mobile Storage Group’s 9.75% senior notes to fair value at December 31, 2007.
 
H) This pro forma adjustment reflects retirement of Mobile Storage Group’s senior subordinated notes.
 
I) This pro forma adjustment represents the issuance of convertible preferred stock with a liquidation preference of $154.0 million, convertible into 8,555,556 shares of Mobile Mini common stock.
 
J) This pro forma adjustment eliminates the historical shareholders’ equity accounts of Mobile Storage Group.
 
K) This pro forma adjustment is to record the estimated amount of loan fees for Mobile Mini’s new $1.0 billion credit facility.
 
L) This pro forma adjustment is to record the estimated transaction fees incurred in relation to the merger and the estimated amount of loan fees for the new credit facility.
 
M) This pro forma adjustment reflects the additional goodwill incurred as a result of the preliminary purchase price allocation and estimated transactions costs.
 
N) These pro forma adjustments relate to reclassifications made to the Mobile Storage Group historical consolidated financial information to conform to Mobile Mini’s presentation. In the Unaudited Pro Forma Condensed Combined Statements of Operations this included reclassifying amounts described by Mobile Storage Group on a single line item as “Trucking and yard costs”, “Management fees to majority stockholder” and “Other selling, general and administrative expenses — stock related compensation” into “Leasing, selling and general expenses” based on Mobile Mini’s reporting for these items.
 
O) This pro forma adjustment is to eliminate the discontinued operations of Mobile Storage Group that are no longer relevant on a going-forward basis.


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P) This pro forma adjustment reduces depreciation expense related to the preliminary purchase price allocation reduction of the lease fleet.
 
Q) This pro forma adjustment reduces interest expense based on the pro forma debt levels at December 31, 2007 and the estimated LIBOR rate on the variable rate line of credit and the estimated effect on other debt costs and amortizations. If the assumed LIBOR rate on the line of credit were to change by 1/8%, interest expense would change by approximately $0.8 million.
 
R) This pro forma adjustment is to reflect income taxes at an assumed combined statutory tax rate of 38.5%.
 
S) This pro forma adjustment reflects the issuance of convertible preferred stock with a liquidation preference of $154.0 million, convertible into 8,555,556 shares of Mobile Mini common stock at a conversion price of $18 per share.
 
T) The pro forma as adjusted book value computation assumes the conversion of the preferred stock into common stock.
 
U) The pro forma as adjusted earnings per share computation assumes the conversion of the preferred shares into common stock.
 
Mobile Mini estimates it will incur approximately $24.5 million of transaction costs, consisting primarily of financial advisory, legal and accounting fees, financing costs and financial printing and other charges related to the purchase of Mobile Storage Group. Approximately $15 million of these transaction costs will be recorded as deferred charges on the combined company’s balance sheet and the remaining approximately $9.5 million will be recorded as part of the cost to purchase Mobile Storage Group. These estimates are preliminary and, therefore, are subject to change.
 
The allocation of the purchase price is based upon management’s preliminary estimates and certain assumptions with respect to the fair value increment associated with the assets to be acquired and the liabilities to be assumed. The actual fair values of the assets and liabilities will be determined as of the date of acquisition and may differ materially from the amounts disclosed above in the assumed pro forma purchase price allocation because of changes in fair values of the assets and liabilities between December 31, 2007 and the date of the transaction, and as further analysis (including of identifiable intangible assets) is completed. Consequently, the actual allocation of the purchase price may result in adjustments in the Unaudited Pro Forma Condensed Combined Statement of Operations. Following completion of the transaction, the earnings of the combined company will reflect the impact of purchase accounting adjustments, including the effect of changes in the cost bases of both tangible and identifiable intangible assets and liabilities.


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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Mobile Mini.  The disclosure under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2007 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 29, 2007, which are being mailed to you with this proxy statement, are incorporated herein by reference. See “Where You Can Find More Information” on page 94.
 
Mobile Storage Group.  Mobile Services Group, Inc. (referred to in this discussion as “Mobile Services”) was acquired (referred to in this discussion as the “Acquisition”) by MSG WC Holdings Corp. (referred to in this discussion as “Mobile Storage Group”) on August 1, 2006 and in accordance with Securities and Exchange Commission rules has applied “push down accounting” to its post-Acquisition consolidated financial statements to reflect the new basis of accounting. For more information, see Mobile Storage Group’s consolidated financial statements and the related notes included elsewhere in this proxy statement. All references in this discussion to events or activities which occurred prior to the completion of the Acquisition on August 1, 2006 relate to Mobile Services Group, Inc., as the predecessor company (the “Predecessor”). All references in this discussion to events or activities which occurred after completion of the Acquisition on August 1, 2006 relate to Mobile Storage Group, as the successor company (the “Successor”).
 
For purposes of the discussions below, we combined the results of operations of the Predecessor and Successor during the twelve months ended December 31, 2006 in order to achieve a meaningful comparison of Mobile Storage Group’s results of operations during the periods indicated in 2005, 2006 and 2007.
 
Overview
 
Mobile Storage Group is a leading international provider of portable storage products with a lease fleet of over 120,000 portable storage containers, trailers and mobile offices and 87 branch locations throughout the U.S. and U.K. Mobile Storage Group focuses on leasing portable storage products, and, to complement its core leasing business, it also sells portable storage products. Mobile Storage Group’s storage containers and storage trailers provide secure, convenient and cost-effective on-site storage of inventory, construction supplies, equipment and other goods. Mobile Storage Group’s mobile office units provide temporary office space and employee facilities for, among other uses, construction sites, trade shows, special events and building refurbishments. During 2007, Mobile Storage Group leased or sold its portable storage products to over 45,000 customers in diverse end markets ranging from large companies with a national presence to small local businesses.
 
Mobile Storage Group currently has 67 branch locations in the U.S. and revenues attributable to its operations in the U.S. accounted for approximately 59%, 64% and 64% of its total revenues during the years ended December 31, 2005, 2006 and 2007, respectively. Mobile Storage Group currently has 20 branch locations in the U.K. and revenues attributable to its operations in the U.K. accounted for approximately 41%, 36% and 36% of its total revenues during the years ended December 31, 2005, 2006 and 2007, respectively.
 
Merger with Mobile Mini
 
On February 22, 2008, Mobile Storage Group entered into a definitive merger agreement with Mobile Mini, Inc. of Tempe, Arizona. Mobile Storage Group and certain of its subsidiaries, including Mobile Services Group, Inc. and Mobile Storage Group, Inc., will merge into Mobile Mini in a transaction valued at approximately $701.5 million. Pursuant to the merger, Mobile Mini will assume approximately $535.0 million of Mobile Storage Group’s outstanding indebtedness and will acquire all outstanding shares of capital stock of Mobile Storage Group for $12.5 million in cash and shares of newly issued Mobile Mini convertible preferred stock with a liquidation preference of $154.0 million, which will be initially convertible into approximately 8.55 million shares of Mobile Mini common stock, and is redeemable at the holders’ option following the tenth year after the issue date.
 
Closing of the transaction is subject to approval by Mobile Mini’s stockholders, obtaining required governmental approvals, receipt of a new $1.0 billion asset-based revolving credit facility and customary closing conditions. No closing date has been set at this time. Depending on the timing of various disclosure requirements,


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the Mobile Mini stockholder meeting and regulatory approvals, the transaction is expected to close in June 2008. Mobile Storage Group’s discussion of its business, financial conditions and results of operations in this proxy statement does not include the anticipated effects of the combination with Mobile Mini.
 
Discontinued Operations
 
During the fourth quarter of 2006, Mobile Storage Group committed to plans to sell its Action Trailer Sales division (“Action”), thereby meeting the held-for-sale criteria set forth in Statement of Financial Accounting Standard (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Action is comprised of three locations in the U.S., which are primarily engaged in the business of buying and selling used trailers. In accordance with SFAS No. 144 and EITF Issue No. 03-13, “Applying the Conditions in Paragraph 42 of FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, in Determining Whether to Report Discontinued Operations,” the net assets of Action are presented separately as assets held for sale and the operating results of Action are presented within discontinued operations. Prior period financial results were reclassified to conform to these changes in presentation. The disposal of Action’s assets was completed during the third quarter of 2007.
 
Key Financial Measures
 
The following key financial measures are used by Mobile Storage Group’s management to operate and assess the performance of its business: revenues and costs of operations.
 
Revenues.  Lease and lease related revenues represented approximately 82% of Mobile Storage Group’s total revenues during both the year ended December 31, 2006 and the year ended December 31, 2007, respectively. Mobile Storage Group derives its leasing revenues primarily from the leasing of portable storage products. Included in Mobile Storage Group’s lease and lease related revenues are services related to leasing such as charges for a damage waiver and lease equipment repairs. Also included in lease and lease related revenues are the fees that Mobile Storage Group charges for the delivery and pick-up of its leasing equipment to and from its customers’ premises, delivery of equipment Mobile Storage Group sells to its customers and repositioning its leasing equipment.
 
In addition to Mobile Storage Group’s lease and lease related revenues, it also generates revenues from selling containers, trailers and mobile offices to its customers. Sales represented approximately 18% of Mobile Storage Group’s total revenues during both the year ended December 31, 2006 and the year ended December 31, 2007, respectively. Included in Mobile Storage Group’s sales revenues are charges for modifying or customizing sales equipment to customers’ specifications.
 
Costs of Operations.
 
Mobile Storage Group’s costs of operations consist primarily of:
 
  •  cost of sales;
 
  •  trucking and yard costs;
 
  •  selling, general and administrative expenses;
 
  •  depreciation and amortization expenses; and
 
  •  interest expense.
 
Mobile Storage Group’s cost of sales includes the cost of purchasing and refurbishing equipment that it sells to its customers. Trucking costs include the salaries and other payroll-related costs of Mobile Storage Group’s trucking personnel, the costs of operating and maintaining its transportation equipment, including fuel costs, and, when necessary, the cost of hiring outside transportation companies to deliver and pick up its portable storage products. Yard costs include the salaries and other payroll-related costs of Mobile Storage Group’s yard personnel, the costs associated with the maintenance and repair of its lease fleet, the costs of outside shop repairs and the expense of subleasing equipment. Mobile Storage Group’s selling, general and administrative expenses include all costs


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associated with its selling efforts, including marketing costs and salaries and commissions of its marketing and sales staff. These expenses also include Mobile Storage Group’s overhead costs, such as salaries of its administrative, corporate and branch personnel and the leasing of its facilities. Depreciation and amortization expenses are comprised primarily of costs related to depreciation of Mobile Storage Group’s lease fleet and its transportation equipment. Interest expense, which is primarily attributable to Mobile Storage Group’s credit facilities and other debt obligations, is also a significant expense of the business.
 
Results of Operations
 
On August 1, 2006, Mobile Storage Group and its affiliates acquired control of Mobile Services’ capital stock. The amounts shown below for the year ended December 31, 2006 represent a combination of Mobile Services’ results of operations for the period from January 1, 2006 to August 1, 2006 before the Acquisition (the “Predecessor”) with the results for the period from August 2, 2006 to December 31, 2006 of Mobile Storage Group after the Acquisition (the “Successor”).
 
                                         
    Predecessor     Successor     Combined     Successor  
          Period from
    Period from
             
    Year Ended
    January 1 to
    August 2 to
    Year Ended
    Year Ended
 
    December 31,
    August 1,
    December 31,
    December 31,
    December 31,
 
    2005     2006     2006     2006     2007  
    (Dollars in thousands)  
 
Revenues:
                                       
Lease and lease related
  $ 143,417     $ 91,088     $ 75,596     $ 166,684     $ 192,318  
Sales
    35,584       22,410       14,812       37,222       40,809  
                                         
Total revenues
    179,001       113,498       90,408       203,906       233,127  
Costs and expenses:
                                       
Cost of sales
    27,114       16,223       10,289       26,512       28,784  
Trucking and yard costs
    44,764       27,965       23,053       51,018       58,833  
Depreciation and amortization
    19,471       12,191       8,223       20,414       22,216  
Selling, general and administrative expenses
    46,909       32,103       25,797       57,900       70,475  
Management fees
    400       329       29       358        
Acquisition transaction expenses
          40,306             40,306        
                                         
Income (loss) from operations
    40,343       (15,619 )     23,017       7,398       52,819  
Other income (expense):
                                       
Interest expense, net
    (26,249 )     (15,557 )     (19,877 )     (35,434 )     (51,218 )
Foreign currency translation gain (loss)
    (1,386 )     212       74       286       714  
Loss on early extinguishment of debt
    (780 )                        
Other income (expense)
    (241 )     (84 )     (58 )     (142 )     (141 )
                                         
Income (loss) from continuing operations before provision (benefit) for income taxes
    11,687       (31,048 )     3,156       (27,892 )     2,174  
Provision (benefit) for income taxes
    4,652       (9,240 )     1,044       (8,196 )     (1,618 )
                                         
Income (loss) from continuing operations
    7,035       (21,808 )     2,112       (19,696 )     3,792  
Income (loss) from discontinued operations, net of tax provision
    184       337       188       525       (1,110 )
                                         
Net income (loss)
  $ 7,219     $ (21,471 )   $ 2,300     $ (19,171 )   $ 2,682  
                                         


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The data shown below reflects the combined results of operations of the Predecessor and Successor during the twelve months ended December 31, 2006 in order to achieve a meaningful comparison of Mobile Storage Group’s results of operations during the periods indicated in 2005, 2006 and 2007. The data set forth below is expressed as a percentage of total revenues for the periods indicated. Certain amounts may not add due to rounding.
 
                         
    Twelve Months Ended December 31,  
    2005     2006     2007  
 
Revenues:
                       
Lease and lease related
    80.1 %     81.7 %     82.5 %
Sales
    19.9       18.3       17.5  
                         
Total revenues
    100.0       100.0       100.0  
Costs and expenses:
                       
Cost of sales
    15.1       13.0       12.3  
Trucking and yard costs
    25.0       25.0       25.2  
Depreciation and amortization
    10.9       10.0       9.5  
Selling, general and administrative expenses
    26.2       28.4       30.2  
Management fees
    0.2       0.2        
Acquisition transaction expenses
          19.8        
                         
Income (loss) from operations
    22.5       3.6       22.7  
Other income (expense):
                       
Interest expense, net
    (14.7 )     (17.4 )     (22.0 )
Foreign currency translation gain (loss)
    (0.8 )     0.1       0.3  
Loss on early extinguishment of debt
    (0.4 )            
Other income (expense)
    (0.1 )     (0.1 )     (0.1 )
                         
Income (loss) before provision for income taxes and discontinued operations
    6.5       (13.7 )     0.9  
Provision (benefit) for income taxes
    (2.6 )     (4.0 )     (0.7 )
                         
Income (loss) from continuing operations
    3.9       (9.7 )     1.6  
Income (loss) from discontinued operations, net of tax provision
    0.1       0.3       (0.5 )
                         
Net income (loss)
    4.0 %     (9.4 )%     1.2 %
                         


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Twelve Months Ended December 31, 2007 Compared to Twelve Months Ended December 31, 2006
 
                                 
    Twelve Months Ended December 31,     Increase (Decrease)  
    2006     2007     Dollars     Percent  
    (Dollars in thousands)  
 
Revenues:
                               
Lease and lease related
  $ 166,684     $ 192,318     $ 25,634       15.4 %
Sales
    37,222       40,809       3,587       9.6 %
                                 
Total revenues
    203,906       233,127       29,221       14.3 %
Costs and expenses:
                               
Costs of sales
    26,512       28,784       2,272       8.6 %
Trucking and yard costs
    51,018       58,833       7,815       15.3 %
Depreciation and amortization
    20,414       22,216       1,802       8.8 %
Selling, general and administrative expenses
    57,900       70,475       12,575       21.7 %
Management fees
    358             (358 )     (100.0 )%
Acquisition transaction expenses
    40,306             (40,306 )     (100.0 )%
                                 
Income from operations
    7,398       52,819       45,421       614.0 %
Interest expense, net
    (35,434 )     (51,218 )     (15,784 )     44.5 %
Foreign currency translation gain
    286       714       428       149.7 %
Other income (expense)
    (142 )     (141 )     1       (0.7 )%
                                 
Income (loss) before provision for income taxes and discontinued operations
    (27,892 )     2,174       30,066       107.8 %
Provision (benefit) for income taxes
    (8,196 )     (1,618 )     6,578       80.3 %
                                 
Income (loss) from continuing operations
    (19,696 )     3,792       23,488       119.3 %
Income (loss) from discontinued operations, net of tax provision
    525       (1,110 )     (1,635 )     (311.4 )%
                                 
Net income (loss)
  $ (19,171 )   $ 2,682     $ 21,853       114.0 %
                                 
 
Revenues.  Lease and lease related revenues during the twelve months ended December 31, 2007 amounted to $192.3 million compared to $166.7 million during the same period in 2006, representing an increase of $25.6 million or 15.4%. This was driven by an increase in Mobile Storage Group’s average total number of units on lease per month, which increased by 5.4% during the twelve months ended December 31, 2007 compared to the same period last year, combined with increases in price. Mobile Storage Group’s lease fleet increased from 111,892 units as of December 31, 2006 to 117,417 units as of December 31, 2007 as a result of its capital expenditures and acquisition activity. Mobile Storage Group’s average fleet utilization during the twelve months ended December 31, 2007 decreased to 78.3% compared to 80.2% during the same period in 2006 primarily because of (i) an overall decrease in demand for portable storage units from its retail customers as compared to the prior year, combined with (ii) the acquisitions of businesses with lower utilization rates during the fourth quarter of 2006 and during 2007.
 
Sales revenues during the twelve months ended December 31, 2007 amounted to $40.8 million compared to $37.2 million during the same period in 2006, representing an increase of $3.6 million or 9.6%. This was primarily due to growth in sales revenues from Mobile Storage Group’s U.S. operations resulting from an increase in sales of containers and trailers. Growth in the sales revenues in the U.S. was partially offset by a decline in sales revenues from Mobile Storage Group’s U.K. operations.
 
The average value of the U.S. dollar against the British pound continued to decline compared to last year. The average currency exchange rate during the twelve months ended December 31, 2007 was $2.00 to one British pound compared to $1.84 to one British pound during the same period in 2006. This fluctuation in foreign currency exchange rates resulted in an increase to Mobile Storage Group’s lease and lease related revenues and sales revenues


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from the U.K. of $5.6 million and $1.0 million, respectively, during the twelve months ended December 31, 2007 compared to the same period in 2006.
 
Cost of Sales.  Cost of sales, which relates entirely to Mobile Storage Group’s sales business, increased by $2.3 million to $28.8 million during the twelve months ended December 31, 2007 compared to $26.5 million during the same period in 2006 due to higher sales revenues in 2007. Mobile Storage Group’s gross profit margin from sales revenues during the twelve months ended December 31, 2007 increased to 29.5% compared to 28.8% last year mainly due to higher gross margins realized from sales of containers in the U.S. as Mobile Storage Group continues to derive more value from the modifications it performs on containers that it sells.
 
Trucking and Yard Costs.  Trucking and yard costs increased from $51.0 million during the twelve months ended December 31, 2006 to $58.8 million during the twelve months ended December 31, 2007 due to a higher volume of business activity resulting from the growth in Mobile Storage Group’s core leasing business. As a percentage of lease and lease related revenue, trucking and yard costs during the twelve months ended December 31, 2007 compared to the same period in 2006 were unchanged at 30.6%.
 
Depreciation and Amortization.  Depreciation and amortization expenses increased by $1.8 million to $22.2 million during the twelve months ended December 31, 2007 compared to $20.4 million during the same period in 2006. This is primarily due to the growth in Mobile Storage Group’s lease fleet resulting from its capital expenditures and acquisition activities. Depreciation and amortization decreased to 9.5% of total revenues during the twelve months ended December 31, 2007 compared to 10.0% of total revenues during the twelve months ended December 31, 2006.
 
Selling, General and Administrative Expenses.  Selling, general and administrative expenses during the twelve months ended December 31, 2007 amounted to $70.5 million compared to $57.9 million during the twelve months ended December 31, 2006. This $12.6 million increase is primarily due to the following factors: (i) an increase in sales and marketing expenses as Mobile Storage Group continued to make investments in its sales personnel and added resources to its sales and marketing infrastructure in line with its effort to continue increasing organic growth and market expansion; (ii) an increase in administrative expenses in Mobile Storage Group’s U.K. operations primarily related to management consulting expenses incurred during the first six months of 2007 to assist Mobile Storage Group with management and operational initiatives it carried out to improve its U.K. business, and (iii) an increase in the stock-based compensation expense as a result of the vesting of stock options granted by Mobile Storage Group to its key employees. As a result of these factors, Mobile Storage Group’s selling, general and administrative expenses increased to 30.2% of total revenues during the twelve months ended December 31, 2007 compared to 28.4% of total revenues during the twelve months ended December 31, 2006.
 
Acquisition Transaction Expenses.  These expenses were incurred during the twelve months ended December 31, 2006, in connection with the Acquisition. See Note 1 to Mobile Storage Group’s audited consolidated financial statements for additional information regarding these expenses.
 
Interest Expense.  Net interest expense increased to $51.2 million during the twelve months ended December 31, 2007 compared to $35.4 million during the twelve months ended December 31, 2006. This is due to the increase in Mobile Storage Group’s total debt from $458.5 million as of December 31, 2006 to $522.4 million as of December 31, 2007 primarily as a result of borrowings used to finance Mobile Storage Group’s capital expenditures and acquisition activities during 2007. The weighted average interest rate on Mobile Storage Group’s total debt increased from 9.2% as of December 31, 2006 to 9.5% as of December 31, 2007.
 
Income Taxes.  Mobile Storage Group’s income tax benefit for the twelve months ended December 31, 2007 was $1.6 million compared to a benefit of $8.2 million for the twelve months ended December 31, 2006, representing a decrease of $6.6 million. The tax benefit for the twelve months ended December 31, 2006, was due to the net loss resulting from the Acquisition transaction costs incurred in 2006. Mobile Storage Group’s overall effective tax rate was approximately 29% and 74% during 2006 and 2007, respectively. The difference in the effective tax rate compared to the statutory federal rate of 35% in 2006 and 34% in 2007 is primarily due to certain foreign permanent and tax rate differences.


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Net Income.  Net income for the twelve months ended December 31, 2007 was $2.7 million compared to a net loss of $19.2 million for the twelve months ended December 31, 2006 primarily because of the Acquisition transaction costs incurred in 2006.
 
Twelve Months Ended December 31, 2006 Compared to Twelve Months Ended December 31, 2005
 
                                 
    Twelve Months Ended
       
    December 31,     Increase (Decrease)  
    2005     2006     Dollars     Percent  
    (Dollars in thousands)  
 
Revenues:
                               
Lease and lease related
  $ 143,417     $ 166,684     $ 23,267       16.2 %
Sales
    35,584       37,222       1,638       4.6 %
                                 
Total revenues
    179,001       203,906       24,905       13.9 %
Costs and expenses:
                               
Costs of sales
    27,114       26,512       (602 )     (2.2 )%
Trucking and yard costs
    44,764       51,018       6,254       14.0 %
Depreciation and amortization
    19,471       20,414       943       4.8 %
Selling, general and administrative expenses
    46,909       57,900       10,991       23.4 %
Management fees
    400       358       (42 )     (10.5 )%
Acquisition transaction expenses
          40,306       40,306       100.0 %
                                 
Income from operations
    40,343       7,398       (32,945 )     (81.7 )%
Interest expense, net
    (26,249 )     (35,434 )     (9,185 )     35.0 %
Foreign currency translation gain (loss)
    (1,386 )     286       1,672       (120.6 )%
Loss on early extinguishment of debt
    (780 )           780       (100.0 )%
Other income (expense)
    (241 )     (142 )     99       (41.1 )%
                                 
Income (loss) before provision for income taxes and discontinued operations
    11,687       (27,892 )     (39,579 )     (338.7 )%
Provision (benefit) for income taxes
    4,652       (8,196 )     (12,848 )     (276.2 )%
                                 
Income (loss) from continuing operations
    7,035       (19,696 )     (26,731 )     (380.0 )%
Income from discontinued operations, net of tax provision
    184       525       341       185.3 %
                                 
Net income (loss)
  $ 7,219     $ (19,171 )   $ (26,390 )     (365.6 )%
                                 
 
Revenues.  Lease and lease related revenues during 2006 amounted to $166.7 million compared to $143.4 million during 2005, representing an increase of $23.3 million or 16.2%. This was driven by an increase in Mobile Storage Group’s average total number of units on lease per month, which increased by 10.3% during 2006 compared to the same period last year, combined with increases in price. Mobile Storage Group’s lease fleet increased from 99,414 units as of December 31, 2005 to 111,892 units as of December 31, 2006 as a result of Mobile Storage Group’s capital expenditures and acquisition activity. Mobile Storage Group’s average fleet utilization during 2006 decreased to 80.2% compared to 82.2% during 2005 primarily because of a softer retail season this year compared to last year combined with the acquisitions of businesses during 2006 with lower utilization rates. Compared to 2005, retailers in general ordered fewer portable storage units in 2006, such orders were received later during the year and such units were utilized for a shorter period of time during 2006.
 
Sales revenues during 2006 amounted to $37.2 million compared to $35.6 million during 2005, representing an increase of $1.6 million or 4.6%. This was mainly due to growth in revenues from sales of containers at Mobile Storage Group’s U.S. operations. Growth in sales revenues in the U.S. was partially offset by a decline in sales revenues from Mobile Storage Group’s U.K. operations primarily because its revenues from sales of accommodation units returned to normalized levels during 2006 after an unusually high level of sales volume of accommodation units in the U.K. during 2005.


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The average value of the U.S. dollar against the British pound declined during 2006 as compared to 2005. The average currency exchange rate during 2005 was $1.82 to one British pound compared to $1.84 to one British pound during 2006. This fluctuation in foreign currency exchange rates resulted in an increase to Mobile Storage Group’s lease and lease related revenues and sales revenues from the U.K. of $0.7 million and $0.1 million, respectively, during 2006 compared to 2005.
 
Cost of Sales.  Cost of sales, which relates entirely to Mobile Storage Group’s sales business, decreased by $0.6 million to $26.5 million during 2006 compared to $27.1 million during 2005 despite higher sales revenues in 2006. Mobile Storage Group’s gross profit margin from sales revenues during 2006 increased to 28.8% compared to 23.8% during 2005 period mainly due to higher gross margins realized from sales of containers in the U.S. combined with an improvement in product mix. Mobile Storage Group’s sales of accommodation units in the U.K., which generally carry a lower gross margin than sales of storage containers, were lower during 2006 compared to last year.
 
Trucking and Yard Costs.  Trucking and yard costs increased from $44.8 million during 2005 to $51.0 million during 2006 due to a higher volume of business activity resulting from the 
growth in Mobile Storage Group’s core leasing business. As a percentage of lease and lease related revenue, trucking and yard costs decreased to 30.6% during 2006, compared to 31.2% during 2005 because of gains in operating efficiency combined with the improvement in operating leverage Mobile Storage Group realized from higher leasing revenues over the fixed portion of its trucking and yard costs.
 
Depreciation and Amortization.  Depreciation and amortization expenses increased by $0.9 million to $20.4 million during 2006 compared to $19.5 million during 2005 period due to the continued growth in Mobile Storage Group’s lease fleet resulting from its capital expenditures and acquisition activity, as well as higher amortization expenses related to the amortization of other intangible assets recorded as a result of the Acquisition. Depreciation and amortization decreased to 10.0% of total revenues during 2006 compared to 10.9% of total revenues during 2005 due to the growth in Mobile Storage Group’s revenues.
 
Selling, General and Administrative Expenses.  Selling, general and administrative expenses during 2006 amounted to $57.9 million compared to $46.9 million during the same period in 2005. This $11.0 million increase is primarily due to the following factors: (i) an increase in sales and marketing expenses as Mobile Storage Group added sales personnel and other resources to its sales infrastructure to continue to increase organic growth and market expansion; (ii) higher sales commissions paid as a result of higher revenues and (iii) the expensing of stock options effective in January 2006 in accordance with SFAS No. 123(R), “Share-Based Payment,” resulting in $2.4 million of additional compensation expense recorded during 2006. As a percentage of total revenue, selling, general and administrative expenses increased to 28.4% during 2006 compared to 26.2% during 2005 primarily because of the additional investment in resources Mobile Storage Group has made into its sales and marketing infrastructure since the first half of 2005, combined with the compensation expense related to stock options recognized during 2006.
 
Acquisition Transaction Expenses.  These expenses were incurred during the twelve months ended December 31, 2006, in connection with the Acquisition. See Note 1 to Mobile Storage Group’s audited consolidated financial statements for additional information regarding these expenses.
 
Interest Expense.  Net interest expense increased to $35.4 million during 2006 compared to $26.2 million during 2005. This is due to the increase in Mobile Storage Group’s total debt from $250.2 million as of December 31, 2005 to $458.5 million as of December 31, 2006 as a result of new debt obligations Mobile Storage Group incurred under its new capital structure in connection with the Acquisition, combined with borrowings to finance capital expenditures and acquisition activity completed during 2006. This was partially offset by a reduction in the weighted average interest rate on Mobile Storage Group’s debt obligations under its post-Acquisition capital structure. Mobile Storage Group’s weighted average interest rate decreased to 9.2% as of December 31, 2006 compared to 9.5% prior to Mobile Storage Group’s debt refinancing as of December 30, 2005.
 
Foreign Currency Translation.  Ravenstock MSG, Mobile Storage Group’s U.K. subsidiary, has certain U.S. dollar-denominated debt, including short term intercompany borrowings, which are remeasured at each financial reporting date with the impact of the remeasurement being recorded as foreign currency translation gain or loss in Mobile Storage Group’s consolidated statements of income. Mobile Storage Group incurred a foreign


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currency translation gain of $0.3 million during 2006 compared to a loss of $1.4 million during 2005 due to fluctuations in foreign currency exchange rates.
 
Income Taxes.  Mobile Storage Group’s income tax provision decreased by $12.9 million from a provision of $4.7 million during 2005 to a benefit of $8.2 million during 2006 due to pretax losses generated in 2006 as a result of the Acquisition transaction expenses incurred in the amount of $40.3 million. Mobile Storage Group’s overall effective tax benefit rate declined to approximately 29% during 2006 from an effective tax provision rate of approximately 40% during 2005 as a result of certain non-deductible amounts included in the Acquisition transaction expenses.
 
Net Income (Loss).  Mobile Storage Group had a net loss of $19.2 million during 2006 compared to net income of $7.2 million during 2005 primarily due to the $40.3 million of Acquisition transaction expenses which were incurred during 2006, net of the related income tax benefit.
 
Non-GAAP Measures
 
EBITDA and adjusted EBITDA are supplemental measures of Mobile Storage Group’s performance that are not required by, or presented in accordance with GAAP. These measures are not measurements of Mobile Storage Group’s financial performance under GAAP and should not be considered as alternatives to net income, income from operations or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating, investing or financing activities as a measure of liquidity.
 
EBITDA is a non-GAAP measure, which Mobile Storage Group defines as earnings before interest expense, income taxes and depreciation and amortization. Mobile Storage Group calculates adjusted EBITDA by adjusting EBITDA to eliminate the impact of certain items it does not consider to be indicative of the performance of its ongoing operations. You are encouraged to evaluate each adjustment and whether you consider each to be appropriate. In addition, in evaluating EBITDA and adjusted EBITDA, you should be aware that in the future, Mobile Storage Group may incur expenses similar to the adjustments in the presentation of EBITDA and adjusted EBITDA. Mobile Storage Group’s presentation of EBITDA and adjusted EBITDA should not be construed as an inference that Mobile Storage Group’s future results will be unaffected by unusual or non-recurring items.
 
Mobile Storage Group presents EBITDA and adjusted EBITDA because it considers them to be important supplemental measures of Mobile Storage Group’s performance and because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in Mobile Storage Group’s industry, many of which present EBITDA and adjusted EBITDA when reporting their results.
 
EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of Mobile Storage Group’s results as reported under GAAP. Because of these limitations, EBITDA and adjusted EBITDA should not be considered as measures of discretionary cash available to Mobile Storage Group to invest in the growth of Mobile Storage Group’s business or to reduce Mobile Storage Group’s indebtedness. Mobile Storage Group compensates for these limitations by relying primarily on Mobile Storage Group’s GAAP results and using EBITDA and adjusted EBITDA only supplementally.


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The following is a reconciliation of net income to EBITDA and to adjusted EBITDA:
 
                                         
                Period from
    Period from
       
                January 1,
    August 2,
       
                2006 to
    2006 to
    Year Ended
 
    Year Ended December 31,     August 1,
    December 31,
    December 31,
 
    2004     2005     2006     2006     2007  
    Predecessor     Predecessor     Predecessor     Successor     Successor  
    (Dollars in thousands)  
 
Net income (loss)
  $ 3,820     $ 7,219     $ (21,471 )   $ 2,300     $ 2,682  
(Income) loss from discontinued operations
    (451 )     (184 )     (337 )     (188 )     1,110  
                                         
Net income (loss) from continuing operations
    3,369       7,035       (21,808 )     2,112       3,792  
Interest expense, net
    23,096       26,249       15,557       19,877       51,218  
Provision (benefit) for income taxes
    2,539       4,652       (9,240 )     1,044       (1,618 )
Depreciation and amortization
    14,502       19,471       12,191       8,223       22,216  
                                         
EBITDA from continuing operations
    43,506       57,407       (3,300 )     31,256       75,608  
Foreign currency translation (gain) loss(a)
    (1,013 )     1,386       (212 )     (74 )     (714 )
Loss on early extinguishment of debt(b)
          780                    
Other (income) expense
    (270 )     241       84       58       141  
Non-cash stock option expense(c)
                700       1,662       3,168  
Management and board fees(d)
    484       477       388              
Workers’ compensation adjustments(e)
    261       660                    
Non-cash asset impairment charge(f)
    9,155                          
Acquisition transaction expenses(g)
                40,306              
                                         
Adjusted EBITDA from continuing operations
  $ 52,123     $ 60,951     $ 37,966     $ 32,902     $ 78,203  
                                         
 
 
(a) Represents adjustments arising from differences in exchange rates from period to period when U.S. dollar-denominated borrowings of Mobile Storage Group’s foreign subsidiaries are remeasured at each reporting date using the local currency as the functional currency.
 
(b) Represents the incurrence of loss on early extinguishment of debt for the write-off of the remaining unamortized deferred loan costs and the payment of prepayment penalties related to the refinancing of Mobile Storage Group’s revolving credit facility in December 2005.
 
(c) Represents recognition of the cost of all share-based payments to employees, including grants of employee stock options, based on fair values as required by SFAS No. 123(R) adopted by Mobile Storage Group effective on January 1, 2006. Mobile Storage Group estimates the fair value of employee share options using option-pricing models and adjust these estimates throughout the year.
 
(d) Represents: (i) management fees paid to Mobile Storage Group’s previous equity sponsor which Mobile Storage Group does not pay to its new equity sponsor and (ii) board fees paid to Mobile Storage Group’s previous Board of Directors in excess of what Mobile Storage Group pays its new Board of Directors.
 
(e) Represents payments of retroactive supplemental insurance premiums for claims occurring in the period in which the adjustment is made but actually paid in a subsequent period and deduction of the expense of such premium in the period it was actually paid.
 
(f) Represents an impairment charge resulting from the identification of specific lease fleet and property and equipment to be held for sale. Their value was impaired using a comparison of estimated fair market value, which was based upon then current estimates of selling prices or scrap values, less selling costs, compared to the carrying value.


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(g) Represents expenses incurred in connection with the Acquisition. See Note 1 to Mobile Storage Group’s audited consolidated financial statements for additional information regarding these expenses.
 
Liquidity and Capital Resources
 
Mobile Storage Group’s principal sources of liquidity have been cash provided by operations and borrowings under its bank credit facilities or debt agreements. Mobile Storage Group’s historical uses of cash have been for its operating expenses, capital expenditures, acquisitions of businesses and payment of principal and interest on outstanding debt obligations. Supplemental information pertaining to Mobile Storage Group’s combined sources and uses of cash is presented in the table below.
 
                         
    Twelve Months Ended December 31,  
    2005     2006     2007  
    (Dollars in thousands)  
 
Net cash provided by operating activities
  $ 35,195     $ 45,902     $ 42,768  
                         
Net cash used in investing activities
  $ (42,598 )   $ (394,418 )   $ (77,397 )
                         
Net cash provided by financing activities
  $ 9,349     $ 348,092     $ 35,547  
                         
 
Operating Activities.  Net cash provided by operating activities during the twelve months ended December 31, 2007 of $42.8 million primarily relates to income from continuing operations of $3.8 million, provision for doubtful accounts of $1.6 million, non-cash interest expense of $3.3 million, depreciation and amortization of $22.2 million, deferred income taxes of $(2.0) million, stock-based compensation of $3.2 million, accrued interest on senior subordinated notes and accretion of original issue discount of $13.0 million, net cash provided by operating activities of discontinued operations of $7.4 million, and a $9.0 million net decrease in working capital. Net cash provided by operating activities during the twelve months ended December 31, 2006 of $45.9 million primarily relates to the loss from continuing operations of $19.7 million, prepayment penalty on the repayment of subordinated notes of $11.5 million, write-off of deferred financing costs $8.1 million, non-cash interest expense of $3.2 million, depreciation and amortization of $20.4 million, deferred income taxes of $(10.0) million, stock-based compensation of $4.7 million, accrued interest on senior subordinated notes and accretion of original issue discount of $5.0 million, accrued Acquisition transaction expense of $17.2 million, and a $4.2 million net increase in working capital.
 
Investing Activities.  Net cash used in investing activities primarily relates to acquisitions of businesses and capital expenditures. Payments for businesses acquired, net of cash acquired amounted to $31.0 million and $20.9 million during the twelve months ended December 31, 2007 and 2006, respectively. Mobile Storage Group incurred net capital expenditures totaling $46.4 million and $39.2 million during the twelve months ended December 31, 2007 and 2006, respectively. During the twelve months ended December 31, 2006, Mobile Storage Group also incurred expenditures of $317.1 million in connection with the acquisition of the Predecessor company and paid $17.2 million in transaction fees relating to this acquisition.
 
Financing Activities.  Net cash provided by financing activities mainly relates to borrowings or payments on long-term debt under Mobile Storage Group’s debt agreements, and preferred stock redemptions and dividend payments under its pre-Acquisition capital structure. Net cash provided by financing activities of $35.5 million during the twelve months ended December 31, 2007 primarily relates to net borrowings from Mobile Storage Group’s new credit facility during 2007. Net cash provided by financing activities of $348.1 million during the twelve months ended December 31, 2006 mainly relates to $168.6 million in net borrowings from Mobile Storage Group’s new credit facility, $185.3 million of equity contributions, $78.0 million proceeds from the issuance of senior subordinated notes, net of original issue discount, combined with the $200.0 million proceeds from the issuance of the senior notes, $192.3 million repayment of borrowings made under the old credit facility and $83.2 million redemption of subordinated notes.


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Mobile Storage Group’s cash position and debt obligations as of December 31, 2005, 2006 and 2007, are shown below and should be read in conjunction with Mobile Storage Group’s consolidated financial statements and notes thereto included in this proxy statement.
 
                         
    December 31,  
    2005     2006     2007  
    (Dollars in thousands)  
 
Cash and cash equivalents
  $     $ 1,469     $ 2,331  
                         
Debt obligations
  $ 250,247     $ 458,545     $ 522,354  
                         
 
Mobile Storage Group believes that its cash flow provided by operations will be adequate to cover its 2008 working capital needs, debt service requirements and a certain portion of its planned capital expenditures to the extent such items are known or are reasonably determinable based on current business and market conditions. Mobile Storage Group expects to finance certain of its capital expenditure requirements under its credit facilities.
 
Credit Facilities and Financing
 
New Credit Facility
 
In connection with the Acquisition on August 1, 2006, Mobile Storage Group entered into a new credit facility. The new credit facility is a 5-year senior secured, asset-based revolving credit facility providing for loans of up to $300 million, subject to specified borrowing base formulas, of which the dollar equivalent of up to £85 million can be drawn in borrowings denominated in British pounds and may be borrowed (and re-borrowed) by Ravenstock MSG for use in Mobile Storage Group’s U.K. operations. Mobile Storage Group may also incur up to $50 million of additional senior secured debt under the new credit facility, subject to the consent of the joint-lead arrangers under the new credit facility, the availability of lenders willing to provide such incremental debt and compliance with the covenants and certain other conditions under the new credit facility. On August 1, 2006, $162 million was drawn on the new credit facility, including £37.7 million drawn under the U.K. borrowing sublimit. As of December 31, 2007, Mobile Storage Group’s aggregate borrowing capacity pursuant to the borrowing base under the new credit facility amounted to $81.3 million, net of the $218.7 million in outstanding borrowings as of December 31, 2007.
 
Senior Notes
 
Mobile Storage Group issued $200 million of senior notes on August 1, 2006 in connection with the Acquisition. Interest on the senior notes accrues at a rate of 93/4% per annum and is payable on February 1 and August 1 of each year. Mobile Storage Group paid the interest on the notes as they became due, which amounted to a $9.8 million payment each on February 1, 2007, August 1, 2007, and February 1, 2008. The senior notes mature on August 1, 2014. The senior notes are senior unsecured obligations and are guaranteed by all of Mobile Storage Group’s current and future domestic subsidiaries, except for certain immaterial domestic subsidiaries. The senior notes and guarantees are effectively junior to all of Mobile Storage Group’s secured indebtedness to the extent of the collateral securing such indebtedness. The senior notes are not guaranteed by any of Mobile Storage Group’s foreign subsidiaries and are structurally subordinated to the indebtedness and other liabilities of such non-guarantor subsidiaries.
 
Subordinated Notes
 
On August 1, 2006, Mobile Storage Group issued $90 million in aggregate principal amount of subordinated notes to WCAS Capital Partners IV, L.P., an affiliate of Welsh Carson, and a strategic co-investor. The proceeds of the subordinated notes were contributed to Mobile Services in the form of common equity capital and were used to fund the Acquisition.
 
The subordinated notes mature on February 1, 2015 and are structurally and contractually subordinated to the new credit facility and the senior notes. The subordinated notes are unsecured and do not possess the benefit of a guarantee. The subordinated notes accrue interest on a payment-in-kind, non-cash basis at 12.0% per annum for the first two years. Thereafter, interest will be payable quarterly at 10.0% per annum subject to the terms of the new


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credit facility and the senior notes. If Mobile Storage Group is prohibited from making cash interest payments, interest will continue to accrue on a payment-in-kind, non-cash basis at 12.0% per annum.
 
Contractual Obligations
 
Mobile Storage Group’s future contractual obligations as of December 31, 2007 are as follows:
 
                                         
    Payments Due by Period  
          Less Than
    1-3
    3-5
    More Than
 
    Total     1 Year     Years     Years     5 Years  
    (Dollars in thousands)  
 
Debt(1)
  $ 515,697     $ 199     $ 510     $ 218,933     $ 296,055  
Capital lease obligations
    6,657       1,310       2,836       2,069       442  
Interest on debt and capital lease obligations(2)
    211,435       32,188       62,197       61,756       55,294  
Operating leases
    28,228       7,197       10,401       5,270       5,360  
                                         
Total
  $ 762,017     $ 40,894     $ 75,944     $ 288,028     $ 357,151  
                                         
 
 
(1) Principal payments are reflected when contractually required and no early paydowns are reflected. Debt includes $96,014 of subordinated notes, net of unamortized original issue discount of $10,166 as of December 31, 2007.
 
(2)
• Estimated interest for debt for all periods presented is calculated using the interest rate effective as of December 31, 2007 of (i) 7.52% weighted average interest rate on borrowings under the new credit facility and (ii) 9.75% on the senior notes.
 
  •  Assumes interest on the subordinated notes accrues on a payment-in-kind basis at 12.0% per annum until August 1, 2008; afterwards, interest becomes payable in cash at 10.0% per annum until the subordinated notes mature on February 1, 2015.
 
  •  Capital lease interest is based upon contractually agreed upon amounts.
 
Off-Balance Sheet Arrangements
 
Mobile Storage Group does not maintain any off-balance sheet arrangements.
 
Seasonality
 
Demand from some of Mobile Storage Group’s customers can be seasonal. Demand from Mobile Storage Group’s construction customers tends to be higher in the second and third quarters when the weather is warmer. Demand from Mobile Storage Group’s larger retail customers is stronger in the fourth quarter as these customers prepare to store higher levels of inventories for the holiday season. The units leased to Mobile Storage Group’s retail customers tend to be returned in the first quarter of the following year, leading to lower utilization rates and rental revenues during this period.
 
Critical Accounting Policies
 
The preparation of Mobile Storage Group’s financial statements, in accordance with generally accepted accounting principles (“GAAP”), requires it to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Mobile Storage Group evaluates its estimates and judgments on an ongoing basis. Mobile Storage Group bases its estimates and judgments on historical experience and on various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Mobile Storage Group’s actual results may differ from these estimates under different assumptions or conditions.


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Mobile Storage Group believes the following critical accounting policies and the related judgments and estimates affect the preparation of its consolidated financial statements:
 
Revenue Recognition.  Mobile Storage Group leases and sells various types of storage containers, trailers and mobile offices to customers. Leases to customers are generally on a short-term basis, qualifying as operating leases. The aggregate lease payments are generally less than the purchase price of the equipment. Revenue is recognized as earned in accordance with the lease terms established by the lease agreements and when collectibility is reasonably assured. Revenue from sales of equipment is recognized upon delivery and when collectibility is reasonably assured.
 
Revenue from sales and lease equipment unit delivery and hauling is recognized when these services are provided. Costs associated with these activities are included in trucking and yard costs in the consolidated statements of income.
 
Customers in the U.S. are generally billed in advance for each 28-day period and customers in the U.K. are generally billed monthly in arrears. Deferred revenue is recorded for the unearned portion of pre-billed lease income.
 
Depreciation of Lease Equipment.  Lease equipment consists primarily of storage containers, storage trailers and mobile offices. The lease equipment is recorded at cost and depreciated on a straight-line basis over their estimated useful lives, as follows: containers — 20 years; trailers and portable steel offices — 15 years; portable timber offices — 10 years. Salvage values are determined when the lease equipment is acquired and are typically 70% for containers and 10% for trailers and steel and timber mobile offices. Management of Mobile Storage Group believes the estimated salvage values for Mobile Storage Group’s portable storage products do not cause carrying values to exceed net realizable values. Normal repairs and maintenance to lease equipment are expensed as incurred and included in yard costs.
 
Goodwill and Other Intangible Assets.  Mobile Storage Group accounts for goodwill in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 prohibits the amortization of goodwill and intangible assets with indefinite useful lives and requires these assets be reviewed for impairment at least annually. Mobile Storage Group tests goodwill for impairment using the two-step process prescribed in SFAS No. 142. The first step is a screen for potential impairment, while the second step measures the amount of the impairment, if any. Mobile Storage Group performed the required impairment tests of goodwill and indefinite-lived intangible assets as of October 1, 2005, 2006 and 2007. Based on these tests, Mobile Storage Group determined that no impairment related to goodwill and indefinite-lived intangible assets exist.
 
Other intangible assets with finite useful lives are amortized over their useful lives. Intangible assets with finite useful lives consist primarily of noncompete covenants and customer relationships which are amortized over the expected period of benefit which range from five to ten years. Noncompete covenants are amortized using the straight-line method while customer relationships are amortized using an accelerated method that reflects the related customer attrition rates.
 
Provision for Doubtful Accounts.  Mobile Storage Group is required to estimate the collectibility of its trade receivables. Accordingly, Mobile Storage Group maintains allowances for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Mobile Storage Group evaluates a variety of factors in assessing the ultimate realization of these receivables, including the current credit-worthiness of its customers, its days outstanding trends, a review of historical collection results and a review of specific past due receivables. If the financial conditions of Mobile Storage Group’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required, resulting in decreased net income. To date, uncollectible accounts have been within the range of expectations of Mobile Storage Group’s management.
 
Commitments and Contingencies.  In the normal course of business, Mobile Storage Group estimates potential future loss accruals related to legal, tax and other contingencies. These accruals require Mobile Storage Group management’s judgment on the outcome of various events based on the best available information. However, due to changes in facts and circumstances, the ultimate outcomes could be different than Mobile Storage Group management’s estimates.


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Recent Accounting Pronouncements
 
In June 2006, the Financial Accounting Standards Board (FASB) issued Financial Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 is effective for fiscal years beginning after December 15, 2006. Mobile Storage Group adopted the provision of this interpretation effective January 1, 2007. The adoption of FIN 48 did not have a material impact on Mobile Storage Group’s consolidated financial position and results of operations. See Note 7 — “Income Taxes” to Mobile Storage Group’s consolidated financial statements included in this proxy statement for further discussion.
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements, but does not require any new fair value measurement. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Mobile Storage Group is in the process of determining the effect, if any, that the adoption of SFAS No. 157 will have on its consolidated financial statements. Because Statement No. 157 does not require any new fair value measurements or remeasurements of previously computed fair values, Mobile Storage Group does not believe the adoption of this Statement will have a material effect on Mobile Storage Group’s results of operations or financial condition.
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). Under SFAS No. 159, Mobile Storage Group may elect to report financial instruments and certain other items at fair value on a contract-by-contract basis with changes in value reported in earnings. This election is irrevocable. SFAS No. 159 provides an opportunity to mitigate volatility in reported earnings that is caused by measuring hedged assets and liabilities that were previously required to use a different accounting method than the related hedging contracts when the complex provisions of SFAS No. 133 hedge accounting are not met. SFAS No. 159 is effective for years beginning after November 15, 2007. Mobile Storage Group does not believe the adoption of this Statement will have a material effect on its results of operations or financial condition.
 
In December 2007, the FASB issued SFAS No. 141R (revised 2007), “Business Combinations”, which replaces SFAS No 141. SFAS 141R establishes the principles and requirements for how an acquirer: (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R makes some significant changes to existing accounting practices for acquisitions. SFAS 141R is to be applied prospectively to business combinations consummated on or after the beginning of the first annual reporting period on or after December 15, 2008. Mobile Storage Group is currently evaluating the impact SFAS 141R will have on Mobile Storage Group’s future business combinations.
 
Quantitative and Qualitative Disclosures about Market Risk
 
Mobile Storage Group is exposed to market risk from changes in interest rates, especially U.S. LIBOR and U.K. LIBOR applicable to the new credit facility, and from fluctuations in foreign currency exchange rates as a result of Mobile Storage Group’s operations in the U.K.
 
Interest Rate Risks
 
Outstanding balances under the new credit facility bear interest at a variable rate based on a margin over LIBOR. The new credit facility permits Mobile Storage Group to draw funds by taking out LIBOR contracts at varying maturities. LIBOR contracts are fixed rate instruments for a period of between one and six months, entered into at Mobile Storage Group’s discretion, provided that the new credit facility does not permit more than six such contracts to be outstanding in each of the U.S. and U.K. at any one time. Mobile Storage Group’s portfolio of LIBOR contracts vary in length and interest rate. Any adverse change in interest rates could affect Mobile Storage


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Group’s overall borrowing rate when LIBOR contracts are renewed. Given the amounts outstanding under the new credit facility at December 31, 2007, a hypothetical 1% increase in the U.S. LIBOR and U.K. LIBOR from the applicable rates at December 31, 2007 would increase Mobile Storage Group’s net interest expense by approximately $2.2 million on an annual basis and would therefore decrease both Mobile Storage Group’s earnings and cash flow for that annual period.
 
Mobile Storage Group is not currently a party to any interest rate swap agreements or other financial instruments to hedge against the risk of increases in interest rates. Mobile Storage Group’s management monitors interest rates and trends in interest rates and will from time to time evaluate the advisability of entering into derivative transactions to hedge its interest rate risk. Mobile Storage Group cannot predict market fluctuations in interest rates and their impact on its new credit facility. As such, Mobile Storage Group’s operating results in the future may differ materially from estimated results due to adverse changes in interest rates.
 
Mobile Storage Group believes that inflation has not had a material effect on its results of operations. However, an inflationary environment could materially increase interest rates on Mobile Storage Group’s floating rate debt which, as of December 31, 2007, comprised approximately 42% of Mobile Storage Group’s total indebtedness. The price of portable storage units for Mobile Storage Group’s fleet purchases could also increase in such an environment.
 
Foreign Currency Risks
 
Mobile Storage Group is also subject to market risks resulting from fluctuations in foreign currency exchange rates as a result of its operations outside of the U.S. During both the years ended December 31, 2006 and December 31, 2007, Mobile Storage Group derived approximately 36% of its total revenues from its operations in the U.K. Mobile Storage Group estimates that a 10% decrease in the U.S. dollar versus the British pound would have increased its revenues for the years ended December 31, 2006 and December 31, 2007, by approximately $7.3 million and $8.3 million, respectively, or approximately 4% of total revenues in both years. Currently, revenues and expenses of Mobile Storage Group’s operating subsidiary, Ravenstock MSG, in the U.K. are recorded in British pounds, which is the functional currency for this subsidiary.
 
Mobile Storage Group is exposed to market risks related to foreign currency translation caused by fluctuations in foreign currency exchange rates between the U.S. dollar and the British pound. Mobile Storage Group seeks to limit exposure to foreign currency transactional losses from its U.K. operations by denominating revenues and expenses of Mobile Storage Group’s U.K. subsidiary in its functional currency. The assets and liabilities of Mobile Storage Group’s U.K. subsidiary are translated from the British pound into the U.S. dollar at the exchange rate in effect at each balance sheet date, while income statement amounts are translated at the average rate of exchange prevailing during the reporting period. A strengthening of the U.S. dollar against the British pound could, therefore, reduce the amount of cash and income Mobile Storage Group receives and recognizes from its U.K. operations. As foreign exchange rates vary, Mobile Storage Group’s results of operations and profitability may be harmed. The effect of foreign currency translation risks caused by foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on Mobile Storage Group’s operating results for the year ended December 31, 2006 and the year ended December 31, 2007 was not insignificant. As a result of fluctuations in foreign currency exchange rates, Mobile Storage Group’s total revenues increased by approximately $0.9 million and $6.6 million during the year ended December 31, 2006 and the year ended December 31, 2007, respectively, relative to the comparable prior period. Mobile Storage Group cannot predict the effects of exchange rate fluctuations on its future operating results because of the potential volatility of currency exchange rates. To the extent Mobile Storage Group expands its business into other countries, it anticipates that it will face similar market risks related to foreign currency translations caused by exchange rate fluctuations between the U.S. dollar and the currencies of those countries. Mobile Storage Group does not currently engage in foreign currency exchange hedging transactions to manage its foreign currency exposure. If and when Mobile Storage Group does engage in foreign currency exchange hedging transactions, Mobile Storage Group cannot assure you that its strategies will adequately protect its operating results from the effects of exchange rate fluctuations.


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INFORMATION ABOUT MOBILE STORAGE GROUP
 
Business Overview
 
Mobile Storage Group is a leading international provider of portable storage products with a lease fleet of over 120,000 units and 87 branch locations throughout the U.S. and U.K. Mobile Storage Group focuses on leasing portable storage containers, storage trailers and mobile offices, and, to complement its core leasing business, Mobile Storage Group also sells portable storage products. Mobile Storage Group’s storage containers and storage trailers provide secure, convenient and cost-effective on-site storage of inventory, construction supplies, equipment and other goods. Mobile Storage Group mobile office units provide temporary office space and employee facilities for, among other uses, construction sites, trade shows, special events and building refurbishments. During 2007, Mobile Storage Group leased or sold its portable storage products to over 45,000 customers in diverse end markets ranging from large companies with a national presence to small local businesses. For the twelve months ended December 31, 2007, Mobile Storage Group generated revenues of $233.1 million and adjusted EBITDA of $78.2 million.
 
The following charts illustrate Mobile Storage Group’s revenues by type, geography and end markets during 2007:
 
     
Revenue Mix by Type
  Revenue Mix by Geography
     
(PIE GRAPH)
  (PIE GRAPH)
 
Revenue Mix by End Markets
 
(PIE GRAPH)
 
Mobile Storage Group believes its core leasing business is highly attractive because it:
 
  •  delivers recurring revenues with an average lease duration of more than 15 months for its core storage container products;
 
  •  consists primarily of storage containers that have useful lives of approximately 20 years and retain substantial residual value throughout their lives;


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  •  features average monthly leasing rates for storage containers that recoup its average unit investment (excluding variable costs) in approximately 28 months;
 
  •  benefits from high utilization levels that have averaged in excess of 80% over the last five years;
 
  •  produces high incremental unit leasing operating margins on storage containers estimated to be approximately 50% (based on contribution of a new portable storage unit on lease after deductions for the cost of leasing, commissions and depreciation);
 
  •  benefits from a highly diversified customer base; and
 
  •  features discretionary capital expenditures that can be readily adjusted depending on market conditions and opportunities.
 
The majority of Mobile Storage Group’s lease fleet is comprised of refurbished steel portable storage containers purchased from container leasing companies and brokers. Mobile Storage Group also purchases new containers from China, which Mobile Storage Group believes is a cost-effective means of procuring new containers. Mobile Storage Group’s customers use its storage containers for a wide variety of storage applications, including storage of construction materials, retail and manufacturing inventory, documents and records and household goods. Mobile Storage Group’s storage trailers are similar to its storage containers, but also have wheels and provide elevated storage. Mobile Storage Group believes these features provide an added benefit to customers whose operations involve the use of loading docks, such as retailers, distribution centers, manufacturers and other warehouse-type businesses. Mobile Storage Group’s mobile office units include timber units and steel units that can be customized to meet specific customer needs.
 
Mobile Storage Group’s sales business complements its leasing business because it allows Mobile Storage Group to leverage its scale and purchase storage containers on terms that Mobile Storage Group believes are more favorable than those available to certain of its competitors. Mobile Storage Group believes that its sales business further complements its leasing business because there is minimal overlap between the respective customer bases of these businesses and because it facilitates the management of its lease fleet by allowing Mobile Storage Group to regularly sell used equipment and replace it with newer equipment.
 
Industry Overview
 
The storage industry in the U.S. and U.K. includes two primary sectors: fixed-site self-storage and portable storage. Fixed-site self-storage is used primarily by individuals for the temporary storage of household items at a permanent facility. Portable storage, which is the sector in which Mobile Storage Group operates, is used primarily by businesses for secure, temporary storage at the customer’s location. The portable storage industry serves a broad range of industries, including construction, services, retail, manufacturing, transportation, utilities and government.
 
Portable storage offers customers a flexible, secure, cost-effective and convenient alternative to constructing permanent warehouse space or storing items at a fixed-site self-storage facility by providing additional space for higher levels of inventory, equipment or other goods on an as-needed basis. Although Mobile Storage Group is not aware of any published estimates, Mobile Storage Group believes the portable storage industry is growing due to an increasing awareness of its convenience and cost benefits.
 
The portable storage industry is highly fragmented and remains mostly local in nature. Mobile Storage Group believes that there are more than 2,000 businesses in the U.S. and more than 300 businesses in the U.K. that lease portable storage products. Mobile Storage Group believes most of these businesses are small, family-run operations.
 
Mobile Storage Group believes it is one of a few competitors in the U.S. and U.K. who possesses the branch network, customer relationships and infrastructure to compete on a national and regional basis while maintaining a strong local market presence. Mobile Storage Group believes that national and regional customers are increasingly seeking providers with a multi-market presence, breadth and quality of product selection, centralized sales and service capabilities and management information tools that provide real-time tracking capability in order to more efficiently satisfy their portable storage needs. Mobile Storage Group believes that having a local presence through


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an extensive branch network provides a national storage provider a competitive advantage by allowing it to reduce the time and cost of delivering portable storage products to customer sites and provide superior customer service.
 
Mobile Storage Group’s Business Strengths
 
Mobile Storage Group is a leading provider of portable storage products on a national, regional and local basis in both the U.S. and U.K. Mobile Storage Group believes its leading position is due to the following strengths: