Company: MGRC
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023116
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Company: MCGRATH RENTCORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
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NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESOrganizationMcGrath RentCorp and its wholly-owned subsidiaries (the “Company”) is a California corporation organized in 1979.  The Company is a diversified business to business rental company with three rental divisions; relocatable modular buildings, portable storage containers and electronic test equipment. Although the Company’s primary emphasis is on equipment rentals, sales of equipment occur in the normal course of business.  At December 31, 2024, the Company was comprised of four reportable business segments: modular building segment ("Mobile Modular"), portable storage container segment (“Portable Storage”), electronic test equipment segment (“TRS-RenTelco”) and classroom manufacturing division selling modular classrooms in California (“Enviroplex”).Mutual decision to terminate Merger Agreement with WillScot Mobile Mini Holdings Corp.As previously disclosed, on January 28, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with WillScot Mobile Mini Holdings Corp., a Delaware corporation ("WillScot Mobile Mini”), Brunello Merger Sub I, Inc., a California corporation and a direct wholly owned subsidiary of WillScot Mobile Mini, and Brunello Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of WillScot Mobile Mini.  On September 17, 2024, the Company and WillScot Mobile Mini mutually agreed to terminate the Merger Agreement, effective upon WillScot Mobile Mini's cash payment of $180.0 million to the Company, which was received on September 20, 2024.Transaction costs attributed to the Merger Agreement are reported in the Company's Corporate segment.  Expenses recognized as a result of the terminated merger during year ended December 31, 2024, were $63.2 million.  The termination payment received of $180.0 million, net of transaction costs, resulted in net proceeds received of $116.8 million during the year ended December 31, 2024.  The Company determined that the transaction costs incurred on the terminated merger were significant and required separate presentation on the Company's consolidated statements of income for the year ended December 31, 2024.  Due to this determination, the Company has excluded such transaction costs from Selling and administrative expenses and reported them separately on the consolidated statements of income as non-operating expenses.Principles of ConsolidationThe consolidated financial statements include the accounts of McGrath RentCorp and its wholly-owned subsidiaries.  All