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Extra Space Storage to combine with Life Storage in $12.7B deal

A deal between Extra Space and Life Storage would create the largest storage-facility operator in the country by number of locations, according to the companies.

Extra Space Storage Inc. has struck a $12.7 billion deal to combine with smaller rival Life Storage Inc., which earlier rejected a bid from industry behemoth Public Storage, executives from the companies said. 

Life Storage stockholders are set to receive 0.8950 of an Extra Space share for each share they own, or $145.82, the companies announced Monday. That is more than 30% above Life Storage’s stock price before The Wall Street Journal reported in early February that Public Storage had made an unsolicited offer for the company. Life Storage stock closed Friday at $131.09, giving the company a market value of $11.2 billion. 

Extra Space shares closed Friday at $162.93, giving the company a market capitalization of about $22 billion. Its shareholders are expected to own roughly 65% of the combined company when the transaction closes.

Public Storage, currently the largest storage operator in the country, had bid $129 a share for Life Storage, which said the offer "significantly" undervalued the business. 


Bloomberg reported last month that Extra Space was considering a bid for Life Storage.

A deal between Extra Space and Life Storage would create the largest storage-facility operator in the country by number of locations, according to the companies. Including debt, the combined company would have an enterprise value of roughly $47 billion. 

The combination would increase Extra Space’s storage portfolio by more than 50% by adding roughly 1,200 properties. The combined company, a real-estate investment trust, would have more than 3,500 locations spanning over 264 million square feet. 


"This is an industry where scale really matters," Extra Space Chief Executive Joseph Margolis said in an interview Sunday. 

Extra Space’s board will expand to 12 directors from 10, with three members from Life Storage including CEO Joseph Saffire, who has been at the helm of the company since March 2019. 

"We’ve been really fierce competitors, but together we’re going to be a lot better," Mr. Saffire said. 

Self-storage stocks in the U.S. scored big gains after the onset of the Covid-19 pandemic, as some Americans spent time cleaning out their homes and garages while others packed up and relocated to temporary getaways thanks to new work-from-home flexibility. More recently, the stocks have given back some of those gains.


Life Storage was originally a financial-planning firm when it was founded in 1982, opening its first self-storage facility in Florida in 1985. The Buffalo, N.Y., company operated under the brand Uncle Bob’s Self Storage until rebranding to Life Storage in 2017, according to its website. 

Extra Space, based in Salt Lake City, is currently the second-biggest storage operator in the U.S. behind Public Storage. The business was founded in 1977, and in addition to personal- and business-storage units it runs facilities for boats and recreational vehicles. 

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