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SmartStop and Extra Space Complete $1.4 Billion Merger

SmartStop Self Storage Inc., an owner and operator of self-storage facilities, announced that their acquisition by Extra Space Storage Inc. (NYSE: EXR) has been completed.

As previously reported by The DI Wire, SmartStop stockholders will receive $13.75 per share in cash in a deal valued at $1.4 billion. Extra Space paid approximately $1.31 billion, and the remaining $90 million came from the sale of certain assets by SmartStop immediately prior to closing.

H. Michael Schwartz, founder of SmartStop, said, “The $13.75 per share price represents a premium of approximately 27 percent over SmartStop’s most recently announced net asset value, and assuming the reinvestment of all prior dividends, results in an average annual return on investment in excess of 15.3 percent,” continued Schwartz.

Formerly known as Strategic Storage Trust Inc., SmartStop was formed in 2007 as a publicly registered non-traded real estate investment trust and raised approximately $568 million of equity capital from investors. During its approximately 8-year operating period, the company provided investors with cash distributions at an annual rate equal to 7 percent of investment (based on a $10 per share offering price).

As a result of the SmartStop acquisition, Extra Space acquired 122 stores and assumed the property management of 43 stores previously managed by SmartStop.

Immediately prior to the closing of the merger, SmartStop sold SmartStop Asset Management LLC to an entity controlled by Schwartz. SmartStop Asset Management now serves as the sponsor of Strategic Storage Trust II, a public non-traded REIT focused on stabilized self storage properties, and Strategic Storage Growth Trust Inc., a public non-traded REIT focused on development, re-development, lease-up and expansion self storage properties. In connection therewith, the executive team of SmartStop is now employed by SmartStop Asset Management.

Extra Space Storage Inc. is headquartered in Salt Lake City, is a fully integrated, self-administered and self-managed real estate investment trust. As of October 1, 2015, Extra Space owned and/or operated 1,335 self-storage properties in 36 states, Washington, D.C. and Puerto Rico. Their portfolio totals approximately 885,000 units and 99.8 million square feet of rentable space.