Summary
Public Storage (PSA) has announced a significant strategic move, entering into a definitive Agreement and Plan of Merger with National Storage Affiliates Trust (NSA). This transaction will see NSA merge with a wholly owned subsidiary of Public Storage, with Public Storage operating as the surviving entity. The merger consideration for NSA common shareholders is set at 0.1400 shares of Public Storage common stock per share of NSA common stock, along with cash in lieu of fractional shares. Preferred shareholders of NSA will receive an equivalent class of Public Storage preferred shares. A notable aspect of this transaction is the formation of a joint venture, the 'Dropdown JV', which will hold approximately $3.2 billion of real estate assets contributed by NSA's operating partnership. This JV will be approximately 80% owned by certain limited partners of NSA's operating partnership and 20% by a Public Storage subsidiary. The JV is expected to have around $2.2 billion in debt and aims to distribute at least $2.28 per unit annually for the first three years, with Public Storage providing support for these distributions.
Key Highlights
- 1Public Storage (PSA) to acquire National Storage Affiliates Trust (NSA) through a merger agreement.
- 2NSA common shareholders will receive 0.1400 shares of PSA common stock per NSA share.
- 3NSA preferred shareholders will receive equivalent PSA preferred shares.
- 4Formation of a Dropdown JV to hold approximately $3.2 billion in contributed real estate assets from NSA's operating partnership.
- 5The Dropdown JV will be 80% owned by NSA limited partners and 20% by a PSA subsidiary.
- 6Commitment letters secured for up to $2.0 billion in bridge loans for PSA and up to approximately $2.0 billion for the Dropdown JV.
- 7Key NSA executives have entered into an Election and Support Agreement to vote in favor of the merger.