Morgan Securities LLC is also serving as a financial advisor to Extra Space. is acting as lead financial advisor and Latham & Watkins LLP is serving as legal advisor to Extra Space. The transaction is currently expected to close in the second half of 2023, subject to the approval of Extra Space and Life Storage shareholders and satisfaction of other customary closing conditions.Ĭitigroup Global Markets Inc. The Extra Space Board will be expanded from 10 to 12 directors and will consist of nine directors from Extra Space's Board and three directors from Life Storage. Margolis will remain as CEO and Director. Woolley will remain Chairman of the Board and Joseph D. Positive financial impact: The transaction is expected to be accretive to Core FFO per share within the first year of closing and be leverage neutral.Įxtra Space will retain its name and continue to trade on the NYSE under the ticker "EXR".Embedded growth drivers: The combined businesses' scaled and growing third-party management, joint venture and bridge loan platforms will create a robust pipeline for accelerated external growth.Extra Space will work closely with the Life Storage team to achieve anticipated synergies and intends to leverage Life Storage's talented workforce. ![]() Extra Space has a demonstrated track record of integrating stores onto its platform and delivering outsized returns to shareholders. Significant synergy opportunity: The transaction is expected to generate at least $100 million in annual run-rate operating synergies from G&A and property operating expense savings as well as improved property operating revenue and tenant insurance income.Enhanced diversification: Creates highly diversified portfolio of quality storage assets in markets benefiting from compelling demand and population demographic trends.Uniting Extra Space's and Life Storage's leading technology and data analytics platforms will also allow the combined company to continue to drive same-store net operating income growth while providing exceptional service to customers. Transformative scale: Combines two industry leaders with long track records of outperformance and creates the largest storage operator and the 6 th largest REIT in the RMZ.The combination of Extra Space and Life Storage is expected to result in significant strategic, operational and financial benefits to shareholders, including: I want to thank the Life Storage team for their continued unrelenting dedication and commitment to our business and customers." We are also pleased that Life Storage shareholders will participate in the tremendous upside of the combined Extra Space and Life Storage platform through a significant ownership stake in the combined company. Together with Extra Space, we expect to accelerate growth while maintaining our customer-centric focus and commitment to continued innovation. Joseph Saffire, Chief Executive Officer of Life Storage said, "Following a deliberate and comprehensive review, the Life Storage Board unanimously concluded that the pending transaction with Extra Space maximizes value today and is the transaction most likely to deliver superior long-term returns for our shareholders. The combined portfolio represents the largest storage operation in the country with over 3,500 locations, over 264 million square feet and serving over two million customers. In total, the transaction adds over 88 million square feet to the portfolio. ![]() The transaction will increase the size of Extra Space's portfolio by more than 50% by store count with the addition of Life Storage's 1,198 properties, including 758 wholly-owned, 141 joint venture, and 299 third-party managed stores. We look forward to welcoming the Life Storage family to Team Extra Space and bringing our organizations together to drive enhanced growth." "The business combination is highly synergistic, creating an even stronger combined company that will drive long-term, outsized operational and external growth opportunities through scale efficiencies, higher retained cash flow, data analytics, third-party management relationships and more. ![]() "We are impressed with the management team's strategic repositioning of the Life Storage portfolio over the last seven years, creating a highly diversified portfolio of quality storage assets in strong growth markets," said Extra Space CEO Joe Margolis. The respective boards of directors of both Extra Space and Life Storage have unanimously approved the transaction. At closing, Extra Space and Life Storage shareholders are expected to own approximately 65% and 35% of the combined company, respectively. Under the terms of the agreement, Life Storage shareholders will receive 0.8950 of an Extra Space share for each Life Storage share they own, representing a total consideration of approximately $145.82 per share based on Extra Space's share price close on March 31, 2023.
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