Strategic Storage Growth Trust Inc. has entered into a definitive merger agreement with Strategic Storage Trust II Inc., according to a statement from SSGT Inc. The statement says SSGT will merge with and into a wholly owned subsidiary of SST II.
Under the merger agreement, SSGT stockholders will receive $12 per share in cash, which represents a total purchase price of approximately $340 million, including current outstanding debt to be assumed or repaid, according to the statement. The merger agreement was negotiated on behalf of SSGT by an independent special committee of SSGT’s board of directors, which was formed to conduct a review of potential strategic alternatives.
The release also says a special committee of SSGT’s board of directors, the SSGT board of directors, an independent special committee of SST II’s board of directors, and the SST II board of directors have each approved the merger agreement. The merger remains subject to the approval of SSGT’s stockholders, as well as other customary closing conditions.
H. Michael Schwartz, CEO, president and chairman of the board of directors of SSGT, is quoted in the release as saying, “This merger will provide our stockholders full-cycle liquidity in an all-cash transaction at $12 per share, a price above the most recently announced net asset value.”
The merger is expected to close during the first quarter of 2019, subject to customary closing conditions, including the approval of SSGT’s stockholders, who will vote on the transaction at a special meeting on a date to be announced, the statement says. The transaction is not contingent on receipt of financing by SST II. Under specified circumstances set forth in the merger agreement, SST II will be required to pay SSGT a termination fee of $9.6 million if SST II fails to close the transaction.
The release also says the merger agreement provides SSGT with a go-shop period, during which the special committee of SSGT’s board of directors, with the assistance of its financial advisor, KeyBanc Capital Markets, Inc., will actively solicit alternative proposals from third parties for the next 45 days, concluding at 11:59 p.m. on November 15, 2018. In addition, the statement says the merger agreement provides for SSGT to pay a termination fee of $2.9 million to SST II if SSGT terminates the merger agreement in connection with a superior proposal that arises during the go-shop period, and a termination fee of $9.6 million if SSGT terminates the merger agreement in connection with a superior proposal that arises following the go-shop period. There can be no assurance that this process will result in a superior proposal, according to the source, which adds that SSGT does not intend to disclose developments with respect to the solicitation process unless and until the special committee of SSGT’s board of directors has made a decision with respect to any potential superior proposal.
KeyBanc Capital Markets, Inc. served as financial advisor, and Bass, Berry & Sims PLC served as legal advisor, to the special committee of SSGT’s board of directors, the release says. KeyBanc Capital Markets, Inc. also provided a fairness opinion to the special committee of SSGT’s board of directors in connection with the transaction.