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Extra Space Storage Inc. 8-K Report, Material Agreement (Apr 3, 2023)

Filed April 3, 2023For Securities:EXR

Summary

Extra Space Storage Inc. (EXR) has announced a significant strategic move through an Agreement and Plan of Merger with Life Storage, Inc. This filing details the terms of the proposed merger, which will see Extra Space acquire Life Storage in a stock-for-stock transaction. The deal is structured as a merger of entities, ultimately leading to Life Storage becoming a wholly owned subsidiary of Extra Space. This combination aims to create a larger, more robust self-storage platform. The merger is expected to close in the second half of 2023, subject to customary closing conditions and shareholder approvals from both companies. Key financial considerations include the exchange ratio, where each share of Life Storage common stock will be converted into 0.895 shares of Extra Space common stock. The agreement also addresses the treatment of stock options, restricted stock, and performance units for Life Storage employees, with provisions for accelerated vesting and conversion into merger consideration or cash bonuses. The transaction is intended to qualify as a tax-free reorganization. Both companies' boards have unanimously approved the merger agreement, signaling strong support for the strategic combination.

Key Highlights

  • 1Extra Space Storage Inc. (EXR) enters into a definitive Agreement and Plan of Merger to acquire Life Storage, Inc.
  • 2The transaction is an all-stock deal where Life Storage shareholders will receive 0.895 shares of Extra Space common stock for each share of Life Storage common stock.
  • 3The merger is expected to be completed in the second half of 2023, pending shareholder approvals and other closing conditions.
  • 4The transaction is structured to qualify as a tax-free reorganization for the parties involved.
  • 5The boards of directors of both Extra Space and Life Storage have unanimously approved the merger agreement.
  • 6Life Storage shareholders will vote on the merger, and Extra Space shareholders will vote on the issuance of new shares.
  • 7The agreement includes provisions for the treatment of Life Storage's equity awards (restricted stock, performance units, and stock options).

Frequently Asked Questions

This filing (Form 8-K) announces that Extra Space Storage Inc. (EXR) has entered into a Material Definitive Agreement, specifically an Agreement and Plan of Merger, to acquire Life Storage, Inc. It outlines the key terms and conditions of this proposed merger.

Life Storage shareholders will receive 0.895 shares of Extra Space common stock for each share of Life Storage common stock they own. This exchange ratio is subject to adjustments for fractional shares.

The companies expect the merger to close during the second half of 2023, contingent upon receiving necessary shareholder approvals from both Extra Space and Life Storage, as well as satisfying other customary closing conditions.

The merger is intended to qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code. This generally means that U.S. holders of Life Storage common stock should not recognize gain or loss upon the exchange of their Life Storage stock for Extra Space stock, provided they hold their Life Storage stock as a capital asset. However, investors should consult with their own tax advisors regarding the specific tax consequences of the transaction.