Lok’nStore Group PLC, which operates 26 self-storage facilities in the United Kingdom, has sold its document-storage business, Saracen Datastore Ltd., to competitor Iron Mountain UK PLC for £7.6 million. Lok’nStore intends to use the funds from the sale to pay down debt and help fund its acquisition and development plans, according to a press release.

The company estimated its loan-to-value ratio would decrease from 19.7 percent to 15.1 percent as a result of the sale. In addition, its net asset value per share was expected to increase from £4.80 to £4.89. The Saracen business contributed £2.38 million to Lok’nStore’s revenue and £660,000 to its EBITDA (earnings before interest, taxes, depreciation and amortization) during its last fiscal year to July 31, 2018.

“Executing this strategic disposal and making these further acquisitions continues our strategy of increasing the number of fast-growing landmark self-storage centers,” said Andrew Jacobs, CEO. “We are reallocating capital to enhance the efficiency and quality of our portfolio and expand our asset value whilst further strengthening our balance sheet. We take a tactical approach to the management of both property and financial assets, creating value without significantly increasing risk, whilst maintaining the predictable growth in dividends for investors.”

The company has two storage projects under development that will add about 100,000 square feet of storage to its portfolio next year. It also recently acquired an existing, 42,000-square-foot facility. Additional acquisitions and development projects are expected to grow the company’s operating portfolio to 41 locations, including 21 freehold and eight leasehold facilities. The company will also have 12 properties under management, the release stated.

Founded in 1995, Lok’nStore builds, buys or leases large warehouses or industrial buildings and rents storage units to customers on a weekly basis.

Sources:
Lok’nStore, Strategic Disposal
Morningstar, Lok'nStore Sells Document Storage Business for Nearly GBP8 Million