|
|
6/16/15
|
SmartStop Self Storage Inc has entered into a definitive merger agreement under which it will be acquired by NYSE-traded Extra Space Storage Inc. SmartStop stockholders will receive $13.75 per share in cash which represents a total purchase price of $1.4 bil. Extra Space will pay $1.29 bil, and the remaining $120 mil will come from the sale of certain assets by SmartStop at or prior to the closing.
The boards of directors of both companies have approved the merger, which is subject to approval by the holders of a majority of SmartStop’s common stock and other customary closing conditions. SmartStop’s board of directors has recommended that its stockholders vote in favor of the merger.
“We believe this transaction delivers compelling value to our equity holders and that SmartStop’s properties are an excellent addition to the Extra Space portfolio,” said H. Michael Schwartz, CEO, president and chairman of the board of directors. “We also believe that Extra Space recognizes the tremendous value of our properties, employees and customer base.”
Wayne Johnson, SmartStop’s CIO, added, “We are extremely proud of our high quality, national portfolio of properties, and the resulting value recognized by our stockholders.”
SmartStop, formerly known as Strategic Storage Trust, Inc., was initially formed in 2007 as a public, non-traded real estate investment trust (REIT) with the objective of providing regular income to its investors with the potential for growth through appreciation of its assets.
SmartStop raised approximately $568 mil of equity capital from investors, and during its approximately eight-year operating period, SmartStop consistently provided investors with cash distributions at an annual rate equal to 7 percent of investment (based on a $10 per share offering price). Upon consummation of the merger, SmartStop will have achieved its final objective, a successful liquidity event for its stockholders.
“The $13.75 per share price represents a premium of approximately 27 percent over SmartStop’s most recently announced net asset value, and assuming the reinvestment of all prior dividends, results in an average annual return on investment in excess of 15.3 percent, said Schwartz. “SmartStop’s board of directors, with the assistance of legal and financial advisors, thoroughly evaluated potential options to maximize value for our stockholders. We are confident this merger is in the best interests of all stockholders.”
Certain assets of SmartStop will be sold prior to the closing of the merger, including one store in California, beneficial interests in two stores in Alabama and five stores in Toronto, Canada. The purchase price for these assets is included in the $13.75 per share price payable to stockholders.
At the closing of the merger, the parties will enter into property management agreements for the management of properties owned by Strategic Storage Trust II, Inc. (SST II) and Strategic Storage Growth Trust, Inc. (SSGT) by Extra Space. SmartStop Asset Management LLC will be sold simultaneously with the closing of the merger to an entity controlled by Schwartz and will serve as the sponsor of SST II and SSGT following the merger.
The merger is expected to close during the latter half of 2015. Citigroup Global Markets Inc, KeyBanc Capital Markets Inc and Robert A. Stanger & Co Inc. served as financial advisors to SmartStop, and Baker, Donelson, Bearman, Caldwell & Berkowitz, PC and Nelson Mullins Riley & Scarborough LLP served as legal advisors to SmartStop. Robert A. Stanger & Co Inc also provided a fairness opinion to the board of directors of SmartStop in connection with the merger.
|
|
 Return to the Archive page
|
|
|
|
|
Printer-friendly Version
Email an Associate
