SmartStop Self Storage Inc. has entered into a definitive merger agreement under which it will be acquired by Extra Space Storage Inc. The merger is expected to close during the latter half of 2015. 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.
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 million 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% of investment (based on a $10-per-share offering price). On consummation of the merger, SmartStop will have achieved its final objective, a successful liquidity event for its stockholders.
Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT. The company owns and/or operates over 1,100 self-storage properties in 35 states, Washington, D.C. and Puerto Rico. The company is the second-largest owner and/or operator of self-storage properties in the United States and is the largest self-storage management company in the United States.