Business
Acquisition of Space Maker
Acquisition of Space Maker.
About this update from Safestore Holdings Plc
[{"type":"text","content":"\n \nRNS Number : 8840B Safestore Holdings plc 22 June 2016 \n\nFOR IMMEDIATE RELEASE\n22 June 2016\n \nSafestore Holdings plc\n(\"Safestore\" or the \"Group\")\n \nAcquisition of Space Maker\nEarnings accretive from completion\n \nSafestore is pleased to announce that the condition necessary to acquire Space Maker Stores Limited (\"SMS\") has been satisfied and completion of the acquisition is expected by 29 July 2016. The acquisition is expected to be immediately accretive to Group earnings per share from completion and will support the Group's future dividend capacity. \n \nAn initial consideration of £43.0m less certain downward adjustments to the enterprise value (\"initial consideration\") will be payable in cash on completion of the acquisition. Up to £1.4m of deferred consideration (\"deferred consideration\") may become payable in cash between six months and three years from the date of completion, subject to the SMS business achieving certain performance targets during that period. \n \nSafestore has a strong operational knowledge of the SMS portfolio, having managed the business since 2010 under a management services agreement for which Safestore received £0.6m per annum.\n \nThis acquisition will reinforce Safestore's position as the leading operator in the UK by number of stores with a combined total of 110 stores1, 63 of which will be in London and the South East. The SMS portfolio was operating at 62% occupancy (of built out lettable area) at the end of April 2016 which Safestore believes it can improve once fully integrated into its own operational platform.\n \nIn the year to 30 April 2016, SMS delivered EBITDA (before management fees) of £3.9m (unaudited) on turnover of £8.7m. At the initial consideration price, the SMS portfolio has an implied first year net operating income yield of c.9.4%2 before the impact of management charges which would rise to c.12% if the SMS stores achieve 80% occupancy at today's rental rate levels.\n \nThe SMS business, which had pro forma gross assets3 of £45.6m at 30 April 2015, will be acquired on a debt free basis with the total consideration (comprising the initial consideration and, if applicable, the deferred consideration) expected to be c. £44.4m. The acquisition will be funded from the Group's existing debt facilities, with £45...