Extra Space to Buy Life Storage and Create Largest Storage Company

Scott Peters
03 Apr, 2023
New York City

Life Storage Inc agreed to be acquired by Extra Space Storage Inc for $145.82 a share or $12.7 billion in an all-stock deal.  

The combined company is expected to have a $36 billion equity market capitalization or total enterprise value of $47 billion. 

Life Storage shareholders will receive 0.8950 of an Extra Space share for each 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. 

After the closing of the deal, Extra  Space shareholders will own 65% of the combined company and Life Storage shareholders 35%.

Extra Space management will lead the combined company. 

Kenneth W. Woolley will remain Chairman of the Board  and Joseph D. Margolis will remain as CEO and Director. 

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.

The merger deal between the two has been approved by the board of directors of both companies. 

The transaction is expected to be closed in the second half of 2023. 

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 ventures, and 299 third-party managed stores. 

In total, the transaction adds over 88 million square feet to the  portfolio. 

At the end of 2022, Extra Space managed 887 stores for  third parties and 318 stores in unconsolidated joint ventures, for a total of 1,205 managed stores. 

The company owned and/or operated 2,338 self-storage properties, which comprise  approximately 1.6 million units and approximately 176.1 million square feet of rentable storage space 

After the acquisition of Life Storage, the combined portfolio represents the largest storage operation in the country with over 3,500 locations, over 264 million square feet with two million customers. 

Extra Space Storage dropped 6.3% to $153.0 and Life Storage gained 2.9% to $134.88.  

Extra Space revenue in 2022 was $1.9 billion and net income was $860.7 million and diluted earnings per share was $6.41. 

Life Storage revenue in 2022 was $1.04 billion and net income was $358.1 million or diluted earnings per share was $4.22. 

Citigroup Global Markets Inc. is acting as lead financial advisor and Latham & Watkins LLP is serving as legal advisor to Extra Space. 

J.P. Morgan  Securities LLC is also serving as a financial advisor to Extra Space. 

Wells Fargo Securities and BofA Securities are acting as financial advisors and  Hogan Lovells US LLP and Quinn Emanuel Urquhart & Sullivan LLP are serving as legal advisors to Life Storage.