As part of the agreement, the other institutional partners must be provided the opportunity to purchase CSFB's interest on the same terms being offered to Shurgard in an amount proportional to their respective ownership of Shurgard Europe. If the deal goes through, Shurgard will acquire the interests of two entities through which CSFB owns its interest in Shurgard Europe. Shurgard will pay cash consideration to acquire CSFB's equity interest.
"The opportunity in Europe is unparalleled for self storage and Shurgard Europe enjoys the dominant market position," says Shurgard Chairman and CEO Charles Barbo. "With this strategic investment and our increased ownership stake, Shurgard will look to further integrate the activities of Shurgard in the United States and Europe."
Ian Marcus, the head of CSFB's Real Estate Group in Europe, says he is pleased with the "attractive return" on its investment and that Shurgard Europe continues to be "well positioned for growth in the under-developed European self-storage market."
Shurgard operates a global network of more than 562 self storage properties in seven countries. Shurgard was advised by Salomon Smith Barney Inc. and Banc of America Securities LLC in the transaction.
Also this week, Shurgard says it has executed an agreement to acquire 19 self storage centers located in the Minneapolis-St Paul area that are operated under the name Minnesota Mini-Storage. The all-stock transaction is being structured as a merger of five Minnesota Mini-Storage entities into Shurgard.
Consideration for the 19 centers will be 3.05 million shares of common stock at closing and an additional 50,000 shares if the properties meet certain gross revenue targets prior to the end of 2005. The deal is expected to close sometime in the second quarter.
Under the terms of the agreement, the properties will be unencumbered at closing and will be branded and operated under the Shurgard name. Seventeen of the nineteen properties represent stable assets (84% leased) with the remaining two properties still in lease up (57% leased).
The acquisition will give Shurgard the largest number of self storage properties in the greater Minneapolis-St. Paul area--17% of the market by total rentable sf (1.4 million). Shurgard anticipates the first year Net Operating Income from the properties will be in excess of $8.5 million.
Lehman Brothers acted as financial advisor to Minnesota Mini-Storage in connection with the transaction.
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