YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. IN ORDER TO ENSURE THAT YOUR SHARES ARE VOTED, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. IF GIVEN, YOU MAY REVOKE YOUR PROXY BY FOLLOWING THE INSTRUCTIONS IN THE PROXY STATEMENT.

 

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF EACH OF THE PROPOSALS DESCRIBED IN THE ATTACHED PROXY STATEMENT.

 

This summary highlights selected information regarding our proposed acquisition of Royal Wolf that is more fully discussed elsewhere in this proxy statement. This summary may not contain all of the information that is important to you. You should carefully read this entire proxy statement for a more complete understanding of the acquisition. You also should read the acquisition agreement, which is referred to in Australia as a share sale deed, attached as ANNEX A to this proxy statement, as well as the shareholders agreement and back up purchase agreement attached as ANNEXES B and C, respectively, to this proxy statement. The acquisition agreement is the legal contract that governs the acquisition.

 

The Companies

 

General Finance Corporation (page 72)

 

We are a special-purpose acquisition company organized as a corporation under the laws of Delaware on October 14, 2005. We were formed to effect an acquisition, capital stock exchange, asset acquisition or other similar business combination with an operating business. On April 11, 2006, we completed our initial public offering of securities, or IPO, from which we derived net proceeds of approximately $65.55 million. Of the net proceeds, $65 million, along with proceeds of $700,000 from the private placement of units to our officers and directors, were placed in a trust account while we sought to identify and complete our initial business combination. Accordingly, such funds, together with the earned interest, are to be released to us in connection with the closing of the acquisition, less amounts payable to the holders of our IPO shares who exercise their conversion rights as described in this proxy statement and less the amount of the contingent underwriting discount payable to the underwriters of our IPO. The maximum contingent underwriting discount is $1,380,000, which is subject to reduction by the amount of $0.16 per share for each IPO share that is converted in connection with the acquisition.

 

The remainder of the net proceeds of our IPO, or approximately $550,000, was used by us to pay offering expenses incurred in connection with our IPO. Since our IPO, we have relied for the payment of our operating expenses upon the proceeds from the sale of $250,000 of our shares to our officers and directors prior to our IPO and borrowings under a $3,000,000 line of credit made available to us by Ronald F. Valenta, our Chief Executive Officer and a director. Other than our IPO and pursuit of a business combination, we have not engaged in any business to date.

 

If we do not enter into an agreement in principle or a definitive agreement with respect to a business combination by October 5, 2007, or having done so we fail to complete the business combination by April 5, 2008, we are required under our certificate of incorporation to take all actions necessary to dissolve and liquidate as soon as reasonably practicable. In any liquidation, the funds held in the trust account will be distributed pro rata to the holders of our IPO shares only. Our officers and directors have waived any right to any liquidation distribution with respect to shares of our common stock acquired by them prior to our IPO. In a liquidation, holders of our outstanding warrants would not receive any value for their warrants.

 

Our common stock, warrants to purchase common stock and units (each unit consisting of one share of common stock and one warrant to purchase one share of common stock at a purchase price of $6 per share) are listed on the American Stock Exchange under the symbols “GFN,” “GFN.WS” and “GFN.U,” respectively.

 

The mailing address of our principal executive office is 260 South Los Robles, Suite 217, Pasadena, California 91101, and our telephone number is (626) 584-9722.

 

GFN Australasia Finance Pty Limited (page 72)

 

GFN Australasia Finance Pty Limited, or GFN Australasia, is a newly formed company organized by us under the laws of Australia and wholly owned subsidiary of GFN Australasia Holdings Pty Limited, which is a newly formed company organized by us under the laws of Australia and our wholly owned subsidiary. GFN Australasia and GFN Australasia Holdings Pty Limited were formed by us for the sole purpose of facilitating our acquisition of RWA, and have not engaged in any business other than in connection with the acquisition.

 

References in this proxy statement to “we,” “us,” “our,” and “ours” mean General Finance Corporation and our subsidiaries, including Royal Wolf following the acquisition.

 

GFN Australasia’s mailing address is c/o Robert Barnes, Level 2, 222 Clarence Street, Sydney, New South Wales, Australia 2000, and its telephone number is 001-612-9266-0077.

 

RWA Holdings Pty Limited (page 77)

 

RWA Holdings Pty Limited, or RWA, is a company organized under the laws of Australia and a holding company for Royal Wolf Trading Australia Pty Limited, its principal operating subsidiary acquired in December 2003, and its only other subsidiary, Hi-Tech Pty Limited, which is engaged in substantially the same business and activities as Royal Wolf Trading Australia Pty Limited. RWA engages in no significant business activities apart from its ownership of Royal Wolf Trading Australia Pty Limited and Hi-Tech Pty Limited. RWA and its subsidiaries are collectively referred to in this proxy statement as “Royal Wolf.” The separate financial statements of Royal Wolf Trading Australia Pty Limited as of and for the year ended December 31, 2003 are included elsewhere in this proxy statement.

 

The mailing address of RWA is Suite 201, Level 2, 22-28 Edgeworth David Avenue, Hornsby, New South Wales, Australia 2077, and its telephone number in Australia is 011-612-9482-3466. Royal Wolf maintains a website at www.royalwolf.com.au. The information maintained or made available by Royal Wolf on its website is not part of this proxy statement.

 

Royal Wolf leases and sells portable storage containers, portable container buildings and freight containers in Australia. We are not aware of any published third-party analysis of the Australian portable container market. Based, however, upon its own internal analysis, including discussions with its customers and competitors and informal observations about the size of container fleets on site at competitors’ locations and in container depots and listed in telephone directories in each major metropolitan area, Royal Wolf’s management believes Royal Wolf is the market leader in Australia for container-based storage and accommodation products. Royal Wolf currently has more than 150 employees and operates 15 customer service centers located in every state in Australia. It is represented in all major business centers in Australia and, as such, is the only container leasing and sales company in Australia with a nationally integrated infrastructure and work force.

 

Royal Wolf serves both small to mid-size retail customers and large corporate customers in the following sectors: road and rail; moving and storage; mining and defense; and portable buildings. Royal Wolf’s present revenue mix is approximately 69% sales and 31% leasing.

 

Royal Wolf’s products include:

 

Portable Storage Containers:  Royal Wolf leases and sells portable containers for on-site storage by customers that include retail outlets and manufacturers, government departments, farming and agricultural concerns, building and construction companies, clubs and sporting associations, mine operators and the general public. Royal Wolf’s products include general purpose dry storage containers, refrigerated containers and hazardous goods containers in a range of standard and modified sizes, designs and storage capacities.

 

Portable Container Buildings:  Royal Wolf also leases and sells portable container buildings as site offices and for temporary accommodations. Royal Wolf entered the portable building market in August 2005 with 20-foot and 40-foot portable buildings manufactured from steel container platforms which it markets to a subset of its portable storage container customer base.

 

Freight Containers:  Royal Wolf also leases and sells freight containers specifically designed for transport of products by road and rail. Customers include national moving and storage companies, distribution and logistics companies, freight forwarders, transport companies, rail freight operators and the Australian military. Royal Wolf’s freight container products include curtain-side, refrigerated and bulk cargo containers, together with a range of standard and industry-specific dry freight containers.

 

The Sellers (page 88)

 

The shareholders from whom we will purchase the shares of RWA at the closing include Bison Capital Australia LP, a Delaware limited partnership, which we refer to in this proxy statement as Bison-GE. Bison-GE is affiliated with Bison Capital Management, LLC, a private equity firm, which we refer to in this proxy statement as Bison Capital, and GE Asset Management Incorporated on behalf of the General Electric Pension Trust, both of which are affiliates of General Electric Corporation, or GE. The other current shareholders of RWA are Cetro Pty Limited, FOMJ Pty Limited, FOMM Pty Limited, TCWE Pty Limited, which, along with Paul Jeffrey, James Warren, Michael Baxter and Peter McCann, who constitute the majority of the directors and executive officers of RWA, are referred to in this proxy statement as the management shareholders. Bison-GE and the management shareholders are sometimes referred to in this proxy statement as the sellers.

 

On September 12, 2006, we entered into the original acquisition agreement with the management shareholders and Equity Partners Two Pty Limited, an Australian private equity firm, or Equity Partners, under which we agreed to purchase from them all of the shares of capital stock of RWA. On March 29, 2007, we entered into an amended acquisition agreement with Bison-GE, the management shareholders and Equity Partners. Pursuant to the amended acquisition agreement, Bison-GE acquired all of the RWA shares owned by Equity Partners and approximately 50% of the RWA shares owned by the management shareholders for purchase consideration equivalent to the consideration that was originally negotiated by us with the management shareholders and Equity Partners as set forth in the original acquisition agreement.

 

Consideration and Funding (page 57)

 

We will acquire the RWA shares through GFN Australasia. The purchase price of the RWA shares will be $58.4 million, plus $876,500 per month from March 29, 2007 until the closing. The purchase price includes deposits of $1,005,000 previously paid by us in connection with the acquisition. If the acquisition is not completed for any reason, we will forfeit the deposits. We will pay the purchase price of the RWA shares, less the deposits, by a combination of cash and issuance of shares of capital stock of GFN Australasia constituting 13.8% of the outstanding capital stock of GFN Australasia immediately following the acquisition. Assuming the closing occurs on May 31, 2007, the aggregate acquisition consideration will be approximately $101.2 million, including a total of $2.4 million in cash payable by us in two equal installments on the first and second anniversaries of the closing in exchange for a non-compete covenant. The aggregate consideration for Royal Wolf also includes the indebtedness under Royal Wolf’s existing credit facilities with ANZ. There was $37.9 million, including accrued interest, of indebtedness outstanding under these facilities of February 28, 2007. The actual amount outstanding as of the closing will be different, but will in no event exceed $39.4 million of principal.

 

The Acquisition

 

Acquisition Agreement (page 57)

 

GFN Australasia will acquire all of the capital stock of RWA pursuant to an acquisition agreement, which is referred to in Australia as a share sale deed. A copy of the acquisition agreement is attached to this proxy statement as ANNEX A.

 

Recommendation of our Board of Directors (page 30); Reasons for the Acquisition (page 43)

 

After careful consideration of the business and operations of Royal Wolf and the terms and conditions of the acquisition agreement, our board of directors has unanimously approved the acquisition of RWA and determined that it is in the best interests of us and our stockholders. No fairness opinion was sought or obtained by our board of directors in reaching its determination.

In considering the acquisition, our board of directors, in working with management:

 

 

 

During the course of reaching its decision to approve the acquisition, our board of directors considered a number of factors and consulted our management and outside legal and due diligence advisors. The factors considered by our board of directors included, among others, the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the course of its deliberations, our board of directors also considered a variety of risks and other countervailing factors, including:

 

 

 

 

 

 

 

The foregoing discussion of the factors considered by our board of directors is not intended to be exhaustive, but sets forth the principal factors considered by the board. After evaluating the foregoing factors and consulting with its legal counsel and its other advisers, our board of directors unanimously determined that the acquisition is in the best interests of us and our stockholders and approved the acquisition in light of the various factors described above and other factors that our directors present concluded were appropriate. Our board of directors also believes that the acquisition is fair to us and our stockholders. No fairness opinion was sought or obtained by our board of directors in making its determinations. In view of the variety of factors considered by our board of directors in connection with its evaluation of the acquisition and the complexity of these matters, our board of directors did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision and 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 the ultimate determination of our board of directors. Rather, our board of directors made its recommendation based on the totality of information presented to and the investigation conducted by it. In considering the factors discussed above, individual directors may have given different weights to different factors.

Accordingly, our board of directors unanimously recommends that stockholders vote “FOR” approval of the acquisition.

 

Management and Strategy (page 104)

 

After the acquisition, all of our current directors and officers will continue to serve in the capacities described under “Directors and Management Following the Acquisition.” Our management team will continue to execute our business plan and strategy disclosed in our IPO prospectus of identifying, acquiring and consolidating under our holding company other specialty finance businesses in the U.S., Europe and Asia. Ronald F. Valenta, our Chief Executive Officer, has successfully executed a similar strategy as the Chief Executive Officer and later the Chairman of the Board of Mobile Storage Group. We have no present understandings, arrangements or commitments, however, with respect to any other acquisition.

 

Royal Wolf also will continue to be managed largely by its existing officers, including Robert Allan, its Chief Executive Officer, Peter McCann, its Chief Financial Officer, and James Warren, its Chief Operating Officer. Mr. Allan will be deemed to be one of our executive officers following the acquisition and Messrs. McCann and Warren will be key employees. Each of Messrs. Allan, McCann and Warren is a party to an employment agreement with Royal Wolf which is terminable by either party upon not less than six months’ notice in the case of Mr. Allan and upon not less than three months’ notice in the cases of Messers. McCann and Warren. In connection with the acquisition, Ronald F. Valenta and John O. Johnson will be appointed as directors of RWA, and Michael Baxter, a founder and Executive Director of RWA, will become a consultant to us and Royal Wolf under a consulting agreement, under which he will agree to provide consulting services relating to the transition of ownership of Royal Wolf until March 31, 2008. A copy of Mr. Baxter’s consulting agreement is included as part of ANNEX A to this proxy statement.

 

If the acquisition is completed, we may modify the compensation to our officers and directors based upon the advice and recommendations of a Compensation Committee of our Board of Directors to be established. Ronald F. Valenta, our Chief Executive Officer and Secretary, John O. Johnson, our Chief Operating Officer, and Marc Perez, our Controller, are not currently compensated for their services; and both Mr. Valenta and Mr. Johnson have advised our board of directors that they will continue to serve in these capacities without compensation until at least the earliest of June 30, 2008 or such time as Royal Wolf achieves annualized EBITDA of $20 million or we achieve a company-wide total annualized EBITDA of $40 million.

 

Except as described above, there is no current understanding or arrangement, however, with respect to any such compensation, and our stockholders will have no information with respect to any such future compensation in deciding how to vote their shares with respect to the acquisition.

 

Our management has been focused primarily on accomplishing the Royal Wolf acquisition since, until we complete our initial business combination, we can engage in no business or operations. We have not yet developed a business strategy beyond continuing to implement Royal Wolf’s own business plan and considering how Royal Wolf may serve as our platform company for possible future growth. Royal Wolf is a leading specialty finance company in Australia that we believe has a strong and deep management team and is well-positioned for significant growth domestically in Australia. We also believe Royal Wolf can serve as a both a rental services platform for expansion throughout the Asia-Pacific region and potentially the core management team for the global container leasing segment of our business. The acquisition of RWA will provide us and our stockholders the opportunity to own and operate Royal Wolf and expand upon its existing business and operations.

 

Our Inside Stockholders (page 110)

 

On the record date, our officers and directors owned an aggregate of 1,875,000 shares of our common stock, or approximately 17.9% of our outstanding shares, that they acquired prior to our IPO. They have agreed to vote these shares with respect to the acquisition as the holders of a majority of our IPO shares that are voted at the special meeting. Our officers and directors own no IPO shares,

 

Date, Time and Place of Special Meeting of Our Stockholders (page 30)

 

The special meeting of our stockholders will be held at 9:00 A.M., local time, on May 29, 2007 at the offices of our legal counsel, Troy & Gould Professional Corporation, 1801 Century Park East, 16th floor, Los Angeles, California.

 

Record Date; Voting Power (page 30)

 

You will be entitled to vote or direct votes to be cast at the special meeting if you owned shares of our common stock at the close of business on April 20, 2007, which is the record date for the special meeting. You will have one vote for each share of our common stock you owned at the close of business on the record date. On the record date, there were 10,500,000 shares of our common stock outstanding, of which 8,625,000 shares were IPO shares.

 

Approval of the RWA Shareholders (page 77)

 

The shareholders of RWA approved the acquisition by virtue of their execution of the acquisition agreement, and no further action by the RWA shareholders is needed for approval of the acquisition.

 

Quorum and Vote of General Finance Stockholders (page 30)

 

A quorum of our stockholders is necessary to hold a valid stockholders meeting. A quorum will be present at the special meeting if a majority of the shares of our common stock outstanding as of the record date are presented in person or by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum.

 

The approval of the acquisition will require the approval of the holders of a majority of the shares of our common stock present and entitled to vote at the meeting with respect to the acquisition, as well as the holders of a majority of our IPO shares voted with respect to the acquisition. Notwithstanding these approvals, the acquisition will not be completed if the holders of 20% or more of our IPO shares (1,725,000 or more shares) exercise their conversion rights.

 

Abstentions and broker non-votes will have the same effect as a vote against approval of the acquisition. Please note, however, that you cannot exercise your conversion rights unless you affirmatively vote against approval of the acquisition.

 

Conversion Rights (page 32)

 

Under our certificate of incorporation, stockholders holding IPO shares may vote against approval of the acquisition and demand that we convert such shares into a pro rata share of the funds held in the trust account established at the time of our IPO. In addition to voting against approval of the acquisition, you must tender your share certificate or accomplish the certification of your “street name” shares and demand conversion of your shares in accordance with the instructions in this proxy statement prior to the special meeting of stockholders.

 

If conversion rights are exercised properly and the acquisition is completed, we will convert each IPO share into a pro rata portion of the funds held in the trust account as of the date two business days prior to completion of the acquisition. We anticipate that this would amount to not less than approximately $7.82 per IPO share based upon the funds in the trust account as of February 28, 2007. This compares to the closing sale price of our common stock of $7.63 as reported on the American Stock Exchange on March 23, 2007. The actual conversion amount will vary. Our stockholders should verify the market price of our common stock prior to selling any common stock in the public market, since they may be able to receive greater proceeds from exercising their conversion rights than from selling their shares assuming that the acquisition is completed.

 

If you exercise your conversion rights, then you will be exchanging your shares of our common stock for cash and will no longer own the shares. If you properly exercise your conversion rights, you will be entitled to receive cash for your shares only if you present your stock certificate to our transfer agent or obtain certification of your “street name” shares as described in this proxy statement not later than 12:00, noon, New York City Time, on May 29, 2007 and continue to hold your shares through the completion of the acquisition. If the acquisition is not completed, these shares will not be converted into cash. An improper exercise of conversion rights may be remedied at any time up until the time of the special meeting.

If the acquisition is not completed and we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will be forced to liquidate.

 

We cannot complete the acquisition if holders of 20% or more of our IPO shares (1,725,000 or more shares) exercise their conversion rights.

 

If the acquisition is completed, the foregoing provisions of our certificate of incorporation will no longer apply.

 

Appraisal Rights (page 33)

 

Our stockholders do not have appraisal rights in connection with the acquisition.

 

Proxies (page 31)

 

Proxies may be solicited by mail, telephone or in person. We have engaged MacKenzie Partners, Inc. to assist us in the solicitation of proxies.

 

If you grant a proxy, you may still vote your shares in person if you revoke your proxy at or before the special meeting.

 

Interests of Our Directors and Officers in the Acquisition (page 55)

 

When you consider the recommendation of our board of directors “FOR” approval of the acquisition, you should keep in mind that our officers and directors have interests in the acquisition that are different from, or in addition to, your interests as a stockholder. In particular:

 

 

 

 

 

 

Except as set forth above, none of our officers or directors or their associates has any interest in the acquisition.

 

Conditions to the Completion of the Acquisition (page 60)

 

The completion of the acquisition is conditioned upon our stockholders approving the acquisition no later than September 1, 2007. Notwithstanding their approval, if the holders of 20% or more of our IPO shares exercise their conversion rights, the acquisition cannot be completed.

 

In addition, the completion of the acquisition is conditioned upon, among other things:

 

 

 

 

Except for the stockholder approval condition, any of the foregoing closing conditions may be waived by the party entitled to the benefit of the condition. We may waive one or more of the closing conditions if we deem it advisable to do so.

 

Indemnification and Escrow Provisions (page 61)

 

Equity Partners and each of the management shareholders has agreed in the acquisition agreement to indemnify Bison-GE against claims (as defined) due to breach of the sellers’ warranties, subject to certain limitations. At the closing of our acquisition of Royal Wolf, Bison-GE will assign to us these indemnification rights. The sellers have no liability for a claim unless the amount of the claim is at least $15,800 and until the aggregate of all claims in excess of $15,800 exceeds $296,300, in which event we can claim the whole amount, not just the amount in excess of $296,300. The sellers will have no liability for breach of warranty unless the claim arises within 18 months after the date of the acquisition agreement (five years after the date of the acquisition agreement for breach of certain warranties relating to corporate organization, outstanding shares and share capitalization, compliance with legal requirements, tax, and the environment).

 

The acquisition agreement provides that, $5.5 million of the cash consideration paid or payable to Equity Partners and the management shareholders will be deposited in a separate bank account requiring signatures of us and Equity Partners and the management shareholders for withdrawals. The purpose of this account is to provide a

source of funds to pay these sellers’ indemnification obligations. The acquisition agreement provides that 25% of these funds will be released to these sellers on September 1, 2007 and the balance will be released to them on March 1, 2008, in each case, subject to any paid or pending indemnity claims by us. The acquisition agreement provides that these funds can be released prior to such dates if Equity Partners and the management shareholders obtain warranty insurance in such amount and on such other terms as we may approve.

 

RWA Management Guarantees (page 61)

 

The management shareholders are companies formed by Paul Jeffrey, James Warren, Michael Baxter and Peter McCann to hold their shares of RWA. Under the acquisition agreement, each of these individuals has agreed to personally guarantee the obligations under the acquisition agreement, including indemnification obligations, of his management shareholder company.

 

Shareholders Agreement (page 61)

 

As part of the purchase price of the RWA shares, we will issue to Bison-GE 13.8% of the capital stock of GFN Australasia. At the closing under the acquisition agreement, we and Bision-GE will enter into a shareholders agreement setting forth our rights and obligations with respect to our respective shares of GFN Australasia. Under the shareholders agreement, Bison-GE will have the right to require us to purchase all, but not less than all, of its GFN Australasia shares at any time after the second anniversary of the closing at a cash price specified in the shareholders agreement. We will have a corresponding right to require Bison-GE to sell to us its GFN Australasia shares at any time after the second anniversary of the closing at a price specified in the shareholders agreement if Bison-GE has not previously exercised its right to require us to purchase its GFN Australasia shares.

 

We and Bison-GE also will agree in the shareholders agreement to various restrictions relating to GFN Australasia and our respective GFN Australasia shares, including a restriction against selling or otherwise disposing of our respective GFN Australasia shares unless we sell or dispose of all of our shares and obtain the other’s approval. A copy of the shareholders agreement is attached to the proxy statement as ANNEX B.

 

Backup Purchase Agreement (page 62)

 

As an inducement to Bison-GE and the management shareholders to enter into the acquisition agreement, Mr. Valenta has entered into a backup purchase agreement with Bison-GE and the management shareholders under which he agrees that, if the acquisition agreement is terminated for any reason, he will purchase from Bison-GE and the management shareholders all of the RWA shares at a purchase price equivalent to the purchase price payable by us under the acquisition agreement. The terms of the backup purchase agreement were determined by arm’s-length negotiations among him, Bison-GE and the management shareholders. Mr. Valenta will not be entitled to a fee or other compensation for the agreeing to the backup purchase agreement. A copy of the backup purchase agreement is attached to this proxy statement as ANNEX C.

 

Consulting and Employment Agreements (page 62)

 

In connection with the acquisition, Michael Baxter, the executive director and a founder of Royal Wolf, will enter into a consulting agreement pursuant to which he will agree to provide consulting services relating to the transition of ownership of Royal Wolf until March 31, 2008 for total fee of approximately $39,060. A copy of Mr. Baxter’s consulting agreement is included as part of ANNEX A to this proxy statement.

 

Robert Allan, James Warren and Peter McCann, the three principal executives of Royal Wolf, will continue to serve in these capacities following the acquisition under their existing employment agreements. For more details regarding the terms of these employment agreements, see the discussion under the caption “Consulting and Employment Agreements” on page 61 of this Proxy Statement.

 

Termination, Amendment and Waiver (pages 63 and 64)

 

The acquisition agreement may be terminated as follows:

 

 

 

 

There is no termination or breakup fee payable in connection with the termination of the acquisition agreement; however, if the closing does not occur, we will forfeit deposits of $1,005,000 made by us in connection with the acquisition. The acquisition agreement does not specifically address any other rights of a party in the event of a wrongful refusal or failure of the other party to complete the acquisition. In that event, such party would be entitled to assert its legal rights for breach of contract against the wrongful party.

 

If permitted under applicable law, either we or the sellers may waive any inaccuracies in the representations and warranties made to us or the sellers contained in the acquisition agreement and waive compliance with any agreements or conditions for the benefit of us or the sellers contained in the acquisition agreement. We cannot assure you that any or all of the conditions will be satisfied or waived. The conditions that the acquisition be approved by our stockholders and that the holders of fewer than 20% of our IPO shares exercise their conversion rights cannot be waived.

 

Non-Compete Covenants (page 63)

 

Under the acquisition agreement, Equity Partners and the management shareholders have agreed not to compete with Royal Wolf in Australia or New Zealand for the five-year period following the closing. They also have agreed to refrain from inducing Royal Wolf employees to leave its employ during the two-year period following the closing.

 

Listing on AMEX (page 57)

 

Following the acquisition, our outstanding common stock, warrants and units will continue to be listed for trading on the American Stock Exchange.

 

Tax Consequences (page 64)

 

There will be no tax consequences to our stockholders resulting from the acquisition, except to the extent they exercise their conversion rights.

 

A stockholder who exercises conversion rights will generally be required to recognize capital gain or loss upon the conversion, if such shares were held as a capital asset on the date of the acquisition. This gain or loss will be measured by the difference between the amount of cash received and the stockholder’s tax basis in the converted shares. The gain or loss will be short-term gain or loss if the acquisition closes as scheduled, but may be long term gain or loss if the closing is postponed.

 

Finder’s Fees (page 64)

 

No finder’s fees will be paid in connection with the acquisition.

 

Accounting Treatment (page 64)

 

The acquisition will be accounted for as a reverse acquisition and equity recapitalization, with us treated as the “acquired” company for financial reporting purposes. The acquisition consideration paid to the sellers will be reflected as a distribution to them, and will result in a reduction in stockholders’ equity.

 

Regulatory Matters (page 64)

 

The acquisition is subject to review by the Treasurer of the Commonwealth of Australia. The acquisition is not subject to any regulatory approvals in the U.S.

 

Risk Factors (page 20)

 

Before you grant your proxy or vote or instruct the vote with respect to the acquisition, you should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement could have a material adverse effect on us and Royal Wolf.

 

We believe that some of the information in this proxy statement constitutes forward-looking statements within the definition of the Private Securities Litigation Reform Act of 1995, although the safe-harbor provisions of that act do not apply to statements made in this proxy statement. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. We have based these forward-looking statements on our current expectations about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us and Royal Wolf that may cause the actual future business and financial results of us and Royal Wolf to be materially different from prior results or any results expressed or implied by such forward-looking statements. Factors that might cause or contribute to such a difference include, but are not limited to, those described in the “Risk Factors” section and elsewhere in this proxy statement. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement.

 

All forward-looking statements included in this proxy statement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events.

 

We are providing the financial information in this section to assist you in your analysis of the financial aspects of the acquisition. The information in this section is only a summary, and should be read in conjunction with the historical financial statements and related notes. The historical results included below and elsewhere in this proxy statement are not indicative of the future performance of us and our consolidated subsidiaries, including Royal Wolf, following the acquisition.

 

General Finance Corporation Selected Historical Information

 

The following table sets forth selected historical financial information derived from our audited consolidated financial statements as of and for the period from October 14, 2005 (inception) to December 31, 2006 and as of and for the year ended December 31, 2006.

 

Statement of Operations Information:

 

 

Balance Sheet Information:

 

RWA Selected Historical Consolidated Financial Information

 

The following table sets forth, in Australian dollars, selected historical financial information of RWA derived from RWA’s audited consolidated financial statements as of and for the year ended June 30, 2006, the six months ended June 30, 2005 and the year ended December 31, 2004 contained elsewhere in this proxy statement. The information as of and for the year ended December 31, 2003 was derived from the audited financial statements of Royal Wolf Trading Australia Pty Limited, or RWT, Royal Wolf’s principal operating subsidiary, contained elsewhere in this proxy statement. The information as of and for the years ended December 31, 2002 and 2001 was derived from the unaudited financial statements of RWT that are not contained in this proxy statement. RWA changed its fiscal year-end to June 30 from December 31 commencing with the six months ended June 30, 2005 and the fiscal year ended June 30, 2006. The audited consolidated financial statements of RWA as of and for the year ended June 30, 2006 and December 31, 2004 and as of and for the six months ended June 30, 2005 were prepared in accordance with Australian accounting standards. International financial reporting standards, or IFRS, form the basis of Australian accounting standards, and are referred to in this proxy statement as Australian equivalents to IFRS, or AIFRS, to distinguish them from Australian generally accepted accounting principles, or AGAAP, which were in effect for periods prior to 2004. AIFRS became effective for accounting periods beginning on or after January 1, 2005. Royal Wolf’s first financial statements prepared in accordance with AIFRS were for the six months ended June 30, 2005, with comparative information for the year ended December 31, 2004 restated accordingly. The other financial statements of RWT referred to above were prepared in accordance with AGAAP. AIFRS and AGAAP are not comparable, and both AIFRS and AGAAP differ in some respects from U.S. generally accepted accounting principles, or U.S. GAAP, and are not comparable to U.S. GAAP. However, a reconciliation to U.S. GAAP of the consolidated financial results of RWA and the December 31, 2003 financial statements of RWT is set forth in the notes to the respective consolidated financial statements of RWA and the financial statements of RWT included in this proxy statement.

 

The consolidated financial statements of RWA for each period presented and the financial statements of RWT for the year ended December 31, 2003 have been restated due to a correction of an error in accounting for income taxes as set forth in the notes to the respective consolidated financial statements of RWA and the financial statements of RWT included in this proxy statement.

 

The summarized information below should be read together with the historical financial statements and accompanying notes contained elsewhere in this proxy statement.

 

Consolidated Statement of Operations Information:

 

Consolidated Balance Sheet Information:

 

 

The following summary unaudited pro forma condensed combined financial information is designed to show how our acquisition of RWA might have affected our historical financial statements if the acquisition had been completed at an earlier time. The following summary unaudited pro forma condensed combined financial information was prepared based on the historical financial results of us and RWA. The historical results for RWA have been adjusted to conform with U.S. GAAP and converted to U.S. dollars at the average exchange rate during the periods presented in the statements of income and at December 31, 2006 for the balance sheets. The following should be read in connection with “Unaudited Pro Forma Condensed Combined Financial Statements” and the historical financial statements of RWA that are contained elsewhere in this proxy statement.

 

The unaudited pro forma balance sheet data assumes that the acquisition took place on December 31, 2006 and combines RWA’s December 31, 2006 unaudited consolidated balance sheet data with our audited December 31, 2006 balance sheet data. The unaudited pro forma statements of operations data for the twelve months ended December 31, 2006 gives effect to the acquisition as if it had occurred on January 1, 2006, and combines the results of operations of us and RWA for the periods indicated.

 

The summary unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not necessarily indicative of our combined financial condition or results of operations for future periods or the combined financial condition or results of operations that actually would have been realized had we acquired and owned RWA during these periods:

 

 

 

 

 

The following table sets forth audited historical and unaudited pro forma per share ownership information of us after giving effect to the acquisition, assuming both no conversions and maximum conversions by our stockholders. You should read this information in conjunction with our selected historical financial information. The unaudited pro forma per share information is derived from, and should be read in conjunction with, the “Unaudited Pro Forma Condensed Combined Financial Statements” and related notes included elsewhere in this proxy statement.

 

The unaudited pro forma condensed earnings per share information below does not purport to represent the earnings per share that would have been achieved had we acquired and owned RWA during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma book value per share information below does not purport to represent what our value would have been had we acquired and owned RWA.

 

 

 

 

 

 

Our units, common stock and warrants are listed on the American Stock Exchange under the symbols “GFN.U,” “GFN” and “GFN.WS,” respectively. The following table sets forth the range of high and low sales prices for the units, common stock and warrants for the periods indicated since the units commenced public trading on April 10, 2006, and since the common stock and warrants commenced public trading separately on June 13, 2006:

 

 

The closing sales prices for our units, common stock and warrants as reported on the American Stock Exchange on March 23, 2007 were $8.75, $7.63 and $1.30, respectively. Holders of our units, common stock, and warrants should obtain current market quotations for their securities. The market price of our units, common stock, and warrants may vary at any time before the closing of the acquisition.

 

Holders

 

As of April 20, 2007, the record date for the special meeting, there were [l] holders of record of our units, [l] holders of record of our common stock and [l] holders of record of our warrants. All of our IPO shares, representing approximately 82% of our outstanding common stock, are held in “street name.” We believe that there are hundreds of beneficial holders of our common stock, units and warrants.

 

Dividends

 

We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination.

 

It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future. The payment of dividends subsequent to a business combination will be within the discretion of our then board of directors and will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination.