Columbia, Mo.-based TKG-StorageMart Partners is close to sealing a more than $400 million deal to take full ownership of InStorage Real Estate Investment Trust, based in Alberta, Canada.
The deal consists of an all-cash offer of $4 per share of the company’s stock, which represents a premium over the $3.76-per-share price the stock was trading for on the day the news of the near-acquisition was released, Jan 7. The deal will cost TKG-StorageMart about $416 million.
In October, TKG-StorageMart made a hostile bid of $3.75 per share through its Alberta, Canada-based subsidiary TKG-StorageMart Canada Inc., but the company amended its offer after negotiating with the board and senior management at InStorage, said Cris Burnam, president. TKG-StorageMart currently holds a 15 percent share of InStorage.
The agreement, which is expected to close in February, aims to provide shareholders with a better price for their shares, and helps in establishing a better relationship with the people at the company that will soon become part of the TKG-StorageMart family, Burnam said.
InStorage is the largest owner and operator of self-storage facilities in Canada with more than 50 properties in Alberta, Saskatchewan, Ontario and Quebec.
In a Dec. 9 news release, Lou Maroun, chairman of InStorage’s board of trustees, said the board supports the offer by TKG-StorageMart because it offers a significant increase to the recent trading price of the company’s shares.
TKG-StorageMart ranked 13th in the Inside Self-Storage 2008 Top-Operators List, with 60 facilities and nearly 5 million square feet of storage space in the United States and Canada. Before starting StorageMart in 1999, Burnam ran Storage Trust Realty, which went public in 1994 with a total market capitalization of $113 million and 4 million square feet of self-storage space. In 1999, Public Storage bought Storage Trust’s portfolio of 11.9 million square feet for about $600 million. StorageMart partnered with The Kroenke Group in 2006.