Shurgard has agreed to acquire UK-based self-storage rival, Lok’nStore, for £378m.
The Belgian firm said in a joint statement that the deal represents an opportunity for the firm to accelerate its growth strategy and create value for its shareholders.
As part of the deal, Shurgard will acquire 32 Lok’nStore properties in the South East of England, as well as five more in Manchester, with hopes to "increase its footprint in the two most attractive target markets outside of London".
Furthermore, it stated that it plans to double its size in the UK from 48 stores to 100, including pipeline, with a focus on large cities.
Alongside the cash consideration of £378m, the firms said that an additional £71m spent on development pipeline costs over the past three years, with a refurbishment capex of £11m and transaction costs of £27m.
Chief executive officer at Shurgard, Marc Oursin, said: "Following several successful acquisitions over the past year, I am excited to disclose this new acquisition in the UK, which doubles our presence in the country, and accelerates our growth and expansion strategy. This milestone event for Shurgard adds an additional 171,000 sqm MLA, representing two full years of Shurgard's targeted annual expansion, with new ramp-up and development opportunities to accelerate our growth in existing and new UK markets.
"The acquisition brings with it a strong pipeline and development team, which can be leveraged to accelerate new opportunities in London, the South East and Manchester. We are excited about our ability to acquire, develop, and expand in the UK alongside our other European markets."
Investment director at AJ Bell, Russ Mould, added: "One by one, the UK stock market is being chipped away by foreign companies snapping up UK businesses.
"The 15.9% bid premium looks measly and is significantly less than the 51% average premium seen on UK takeovers last year. It’s therefore a surprise to see Lok’nStore chairman Andrew Jacobs refer to the offer as representing ‘significant value for shareholders’.
"Lok’nStore may be a small guy in a big industry but that doesn’t mean investors will accept the first bid that comes along. Don’t be surprised if there is either reluctance from some shareholders to accept the offer or if another party throws their hat into the ring with a better price."
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