Extra Space Storage will acquire Life Storage in an all-stock transaction valued at about $12.7 billion creating a storage operator with a total enterprise value of $46 billion and a market capitalization of $36 billion.
The companies said in a joint statement that 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.
Per a Wall Street Journal report, Life Storage rejected an unsolicited offer from Public Storage to acquire the company for $129 per share in February.
At closing, Extra Space Storage and Life Storage shareholders are expected to own approximately 65% and 35% of the combined company respectively, which will retain the name Extra Space Storage.
The deal will increase the size of Extra Space Storage’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.
"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,” commented Extra Space Storage CEO Joe Margolis.
Life Storage CEO Joseph Saffire added: "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 transaction is expected to close in the second half of 2023.
Extra Space Storage’s shares had fallen about 4.9% to US$154.98 shortly before noon on Monday, while Life Storage had added 3.9% at US$136.19.
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