Shares of Extra Space Storage (NYSE: EXR) were down in pre-market trading on Monday as the self-administered and self-managed equity REIT announced a merger with Life Storage (LSI) in an all-stock deal. According to the terms of the deal, Life Storage shareholders will receive 0.8950 of an Extra Space share in exchange for each Life Storage share.
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This represents a total consideration of around $145.82 per share based on Extra Space’s share price close on March 31. After the close of the transaction, Extra Space shareholders are expected to own around 65% while Life Storage shareholders are expected to own the remaining 35% of the combined company. The combined company will have a pro forma equity market capitalization of around $36 billion and a total enterprise value of approximately $47 billion.
This deal is expected to “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 transaction adds over 88 million square feet to the portfolio.”
EXR stock has soared by more than 14% in the past three months.