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Safestore buys Stork Self storage

Safestore buys Stork Self storage – Safestore Holdings plc has announced the acquisition of Stork Self Storage (Holdings) Limited (trading as Alligator Self Storage) for GBP56m.

Highlights

  • Exchanged contracts to acquire Stork Self Storage (Holdings) Limited (“SSSHL”), the eleventh largest self-storage portfolio in the UK with 12 stores.
  • Consideration of GBP56m (subject to a potential working capital adjustment) to be funded from existing Group debt facilities
  • At the consideration price, the SSSHL portfolio has an implied first year net operating income yield of c.7.7% (based on forecast EBITDA for the year ended 30 September 2017)
  • Expected to be earnings accretive from completion of the acquisition
  • Acquisition expands Safestore’s portfolio to 146 stores, consolidating its position as the leading self-storage operator in the UK (by maximum lettable area and number of stores)

Frederic Vecchioli, Chief Executive Officer commented: “Over the past fifteen months, Safestore has cemented its market leading position in the UK, investing GBP100m in two earnings accretive acquisitions, and opening 4 new sites with a further 2 stores in the pipeline.  These transactions have supplemented the organic growth being delivered by the existing business. 

With the acquisition of Alligator Self Storage we have acquired a complementary portfolio of largely freehold stores across the UK which demonstrates our ability to source, fund and conclude significant acquisitions. 

Following this acquisition, Safestore will have a total of 146 stores, of which 120 are in the UK and 26 in Paris. When combined with our acquisition and development activity in Paris, we are continuing the consolidation of our leading positions in both markets.”

Acquisition of Stork Self Storage (Holdings) Limited

Safestore is pleased to announce it has exchanged contracts with a company controlled by funds managed or advised by York Capital Management to acquire, SSSHL trading as Alligator Self Storage. The consideration of GBP56.0m (subject to customary working capital adjustment) will be payable in cash on completion of the Acquisition, expected to be 1 November 2017.

SSSHL is the eleventh largest self-storage portfolio in the UK with 12 stores with a maximum lettable area of 563,000 sq ft. SSSHL’s stores, which are geographically complementary to the existing estate, are located in London (Camden), the South East of the UK (Fareham, Farnham, Luton, Southampton and Winchester), Birmingham (three stores), Bolton, Bristol and Nottingham. Ten of the SSSHL stores are freehold or long leasehold and two are leasehold stores with an average remaining lease length of 15.4 years.

The Acquisition will reinforce Safestore’s position as the UK’s largest self storage group by number of sites with a combined total of 120 stores, 67 of which will be in London and the South East. The SSSHL portfolio is currently operating at 68% occupancy (of maximum lettable area).

Pro forma EBITDA after rent is currently c. GBP4.3m per annum on turnover of GBP7.5m. At the consideration price, the SSSHL portfolio has an implied first year net operating income yield of c.7.7%.

The SSSHL business, which had pro forma gross assets of GBP56.4m at 30 September 2016, will be acquired on a debt and cash free basis. The Acquisition will be funded from the Group’s existing debt facilities, with the Group’s GBP60m accordion facility converted into a committed revolving credit facility. On a pro forma basis, the Group’s Loan to Value ratio post completion of the Acquisition would be c.35% compared to 32% at 30 April 2017 (as adjusted on a pro forma basis for our May 2017 refinancing).

The Acquisition is expected to be immediately accretive to Group earnings per share from completion and will support the Group’s future dividend capacity.

SAFE : Safestore buys Stork Self storage

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