SmartStop (Strategic Storage Trust) Scores Big in $1.4 Billion Merger

Extra Space Storage Inc. (NYSE: EXR), an owner and operator of more than 1,100 self-storage properties in 35 states, is acquiring SmartStop Self Storage Inc. for $13.75 per share in a deal valued at $1.4 billion.

SmartStop, formerly known as Strategic Storage Trust, is currently the seventh largest owner and operator of self-storage facilities in the United States, operating 169 self-storage properties in 21 states and Toronto, Canada.

SmartStop stockholders will receive $13.75 per share in cash which represents a total purchase price of $1.4 billion. Extra Space will pay $1.29 billion, and the remaining $120 million will come from the sale of certain assets by SmartStop at or prior to the closing.

“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 H. Michael Schwartz, president and chief executive officer of SmartStop. “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.”

Upon completion of the acquisition, Extra Space will own 121 SmartStop stores and will assume the property management of 43 third-party managed stores, all located in the United States.

The acquisition is subject to the approval of SmartStop’s stockholders and other customary closing conditions. Extra Space management expects the acquisition to close in the latter half of 2015.

Latham & Watkins; Holland & Hart; Sive, Paget & Riesel; and Jones Waldo Holbrook & McDonough acted as Extra Space Storage’s outside legal counsel in connection with this transaction.