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COTTONWOOD HEIGHTS — Utah-based self-storage giant Extra Space Storage announced last month that it would begin the process of acquiring and merging with its rival, Life Storage, in a $12.7 billion, all-stock transaction expected to close in July.
The proposed merger would bring together two industry-leading platforms and the combined company is expected to have a pro forma equity market capitalization of approximately $36 billion, and a total enterprise value of roughly $47 billion.
"With the unanimous support of both company's board of directors, we are excited to be joining forces in a highly strategic business combination between two of the most diversified, highest quality and fastest-growing storage portfolios," Joe Margolis, Extra Space Storage CEO, said in a call with investment analysts after merger plans were announced.
He said that he believes the merger will produce the "preeminent" storage company in the country.
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.
After the deal is closed, Extra Space and Life Storage shareholders are expected to own approximately 65% and 35% of the combined company, respectively, Extra Space Storage said in a press release.
The merger 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. In total, the merger adds over 88 million square feet of storage to the portfolio.
The combined portfolio will make up the largest storage operation in the country with over 3,500 locations, over 264 million square feet, serving over 2 million customers.
"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," said Joseph Saffire, CEO of Life Storage. "Together with Extra Space, we expect to accelerate growth while maintaining our customer-centric focus and commitment to continued innovation. 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."
Following the merger, Extra Space Storage will retain its name and continue to trade on the New York Stock Exchange under the ticker "EXR."
Additionally, the Extra Space Storage board of directors will be expanded from 10 to 12; nine will be from Extra Storage Space and three from Life Storage.
