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17 Nov 2020

SmartStop Self Storage REIT to Acquire Strategic Storage Trust IV for $370 Million

LADERA RANCH, Calif., Nov. 10, 2020 /PRNewswire/ -- SmartStop Self Storage REIT, Inc. ("SmartStop") and Strategic Storage Trust IV, Inc. ("SST IV") announced today that the companies have entered into a definitive agreement to merge in an all-stock transaction, in which SST IV will merge into a newly-formed subsidiary of SmartStop, creating a company with a portfolio of 136 wholly-owned properties and a combined gross book value of approximately $1.5 billion of self storage assets. This transaction will allow the combined company to, among other things, achieve further economies of scale and potentially create greater value as it takes advantage of the benefits of a larger aggregate portfolio.

Per the merger agreement, SmartStop will acquire all of the real estate owned by SST IV, consisting of 24 wholly-owned self storage facilities located across 9 states and 5 joint venture properties in various stages of development located in the Greater Toronto Area. The total SST IV portfolio, including joint venture property estimates at completion of development, represents approximately 22,500 self storage units and 2.6 million net rentable square feet.

"We are excited to announce this transaction and look forward to combining the high-quality assets in the SST IV portfolio with SmartStop's existing portfolio and operational platform." said Michael S. McClure, CEO of SmartStop. "With this merger, the combined company will be better positioned to recognize expense efficiencies, reduce borrowing costs, and aggregate size and scale for the future. Since all of the SST IV portfolio is already branded as SmartStop® Self Storage, there will be total continuity of operations throughout the process."

Under the terms of the agreement, SST IV stockholders will receive 2.1875 shares of SmartStop common stock for each share of SST IV common stock they own. This exchange ratio represents an increase of $0.10 per share from SST IV's most recent estimated Net Asset Value (NAV), when compared to SmartStop's most recent estimated NAV of $10.40 per share. The transaction values SST IV at approximately $370 million, based on September 30, 2020 share counts and debt principal balances outstanding, and using the agreed exchange ratio and SmartStop's estimated NAV per share of $10.40. Upon completion of the transaction, SmartStop stockholders will own approximately 64% of the combined company, SST IV stockholders will own approximately 25%, and management will own approximately 11%, based on SmartStop and SST IV's share and operating partnership unit counts as of September 30, 2020.

"Combining with SmartStop provides a unique opportunity for SST IV to build on its existing portfolio of high-quality assets, diversifying into a larger portfolio of 136 properties and consolidating with the SmartStop® Self Storage brand," added Chairman and CEO of SST IV H. Michael Schwartz. "The economies of scale and financing options that will be available will help drive overall returns, and we believe that being a part of SmartStop should compress SST IV stockholders' timeline for liquidity."

SmartStop and SST IV each formed independent special committees of its boards of directors in order to negotiate and review the merger. The respective special committees, along with the SmartStop and SST IV boards of directors, each unanimously approved the merger agreement, which remains subject to the approval of SST IV's stockholders and other customary closing conditions. The merger is expected to close during the first half of 2021. The merger agreement also stipulates that in the event of a termination of the merger agreement by SST IV under specified circumstances, SST IV will be required to pay SmartStop a termination fee of approximately $7.2 million.

About SmartStop Self Storage REIT, Inc.

SmartStop is a self-managed REIT with a fully integrated operations team of approximately 390 self storage professionals focused on growing the SmartStop® Self Storage brand. SmartStop, through its indirect subsidiary SmartStop REIT Advisors, LLC, also sponsors other self storage programs, including SST IV and other private programs. SmartStop is the tenth-largest self storage company in the U.S., with approximately $1.7 billion of real estate assets under management, including an owned and managed portfolio of 148 properties in 19 states and Toronto, Canada and comprising approximately 99,000 units and 11.2 million rentable square feet. Additional information regarding SmartStop is available at www.smartstopselfstorage.com.

About Strategic Storage Trust IV, Inc.

SST IV is a public non-traded REIT that focuses on the acquisition of stabilized and growth self storage properties. SST IV wholly owns 24 self storage facilities comprising approximately 18,000 self storage units and 2 million net rentable square feet of storage space, as well as one operating property and four parcels of land under development in joint ventures in the Greater Toronto Area with SmartCentres REIT, one of the largest real estate investment trusts in Canada.


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