StorageVault to Acquire Canadian Storage Portfolio for $396.6 Million and Agrees to Internalize Management and Acquire Third Party Management Business for $16 MillionMarch 23, 2017
STORAGEVAULT CANADA INC. (“StorageVault”) (SVI-TSX-V) is pleased to announce the following: (1) it has entered into a share purchase agreement executed on March 21, 2017 to acquire all of the shares of a private Canadian corporation from an arm’s length shareholder for $396,600,000 resulting in StorageVault acquiring a Canadian portfolio of storage assets; and (2) it has reached an agreement in principle with Access Results Management Services Inc., a related party of StorageVault, to internalize management of StorageVault’s 50 stores and acquire the third party management contracts for over 55 stores from Access Results Management Services Inc. for $16,000,000.
ACQUISITION OF CANADIAN STORAGE PORTFOLIO
StorageVault has entered into a share purchase agreement whereby StorageVault will purchase (the “Acquisition”) all of the issued and outstanding shares (the “Shares”) of a private Canadian corporation (“TargetCo”) from an arm’s length shareholder (the “Portfolio Vendor”) of TargetCo. The gross purchase price for the Shares is $396,600,000, subject to customary adjustments.
TargetCo owns storage assets complementing StorageVault’s current operating platform. In evaluating the Acquisition, StorageVault used, in part, financial performance measures such as revenue, net operating income and funds from operations, and these financial performance measures were generally in line with StorageVault’s requirements for acquisitions.
If all of the conditions under the share purchase agreement are met or waived, it is anticipated that the closing of the Acquisition will occur on or around June 30, 2017.
Purchase Price and Payment
The gross purchase price for the Shares is $396,600,000, subject to customary adjustments, and is payable by the issuance of $20,000,000 of common shares of StorageVault at a deemed price of $1.70 per common share, with the remainder of the purchase price being paid with funds on hand, debt assumption and mortgage financing in such proportions to be determined at closing of the Acquisition.
Conditions Precedent to the Proposed Acquisition
The obligations of StorageVault to complete the Acquisition are subject to initial conditions including, but not limited to: satisfactory due diligence; satisfactory Environmental Site Assessment Reports; and formal StorageVault board of directors and acquisition committee approval of the Acquisition. The obligations of StorageVault and the Portfolio Vendor to complete the closing of the Acquisition are subject to the satisfaction of other customary closing conditions including, but not limited to: TSX Venture Exchange (“TSXV”) acceptance and other regulatory approvals of the Acquisition.
INTERNALIZATION OF MANAGEMENT AND ACQUISITION OF THIRD PARTY MANAGEMENT BUSINESS
StorageVault has reached an agreement in principle to internalize management of StorageVault’s 50 stores and acquire the third party management contracts for over 55 stores from Access Results Management Services Inc. (“ARMS”), a related party of StorageVault (the “Transaction”). The gross purchase price for the Transaction is $16,000,000, subject to customary adjustments. It is anticipated that this Transaction will close on or before March 31, 2017. The third party management platform is an important acquisition
funnel for StorageVault and it provides a separate and valuable revenue stream.
Purchase Price and Payment
The purchase price for the Transaction is $16,000,000, subject to customary adjustments, and is payable
by the issuance of $11,000,000 of common shares of StorageVault at a deemed price of $1.70 per
common share, with the remainder of the purchase price being paid with funds on hand.
Conditions Precedent to the Proposed Transaction
The obligation of StorageVault to complete the Transaction is subject to satisfactory due diligence. The
obligations of StorageVault and ARMS to complete the closing of the Transaction are subject to the
satisfaction of other customary closing conditions including, but not limited to, TSXV acceptance of the
TSXV Acceptance and Exemption from MI 61-101 and TSXV Policy 5.9
As ARMS is a non-arm’s length party of StorageVault, the Transaction is considered to be a “related party
transaction” as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions (“MI 61-101”) and TSXV Policy 5.9. StorageVault is relying on exemptions from
the formal valuation and minority approval requirements of MI 61-101 and TSXV Policy 5.9, in respect of
the Transaction, pursuant to Section 5.5(b) (Issuer Not Listed on Specified Markets) and Section 5.7(a)
(Fair Market Value Not More Than 25% of Market Capitalization) of MI 61-101, respectively.
No new insiders will be created, nor will any change of control occur, as a result of the Acquisition or the
Transaction. Completion of the Acquisition and the Transaction are subject to a number of conditions,
including, as set forth above. No finders fees are payable in relation to the Acquisition or the Transaction.
There can be no assurance that the Acquisition or the Transaction will be completed as proposed or at all.
The TSXV has in no way passed upon the merits of the Acquisition or the Transaction and has neither
approved nor disapproved the contents of this news release.
Non-IFRS Financial Measures
Management uses both IFRS and Non-IFRS Measures to assess the financial and operating performance
of the Corporation’s operations. These Non-IFRS Measures are not recognized measures under IFRS, do
not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures
presented by other companies. The Non-IFRS Measures referenced in this news release include the
i. Net Operating Income (“NOI”) – NOI is defined as storage and related services less related
operating costs. NOI does not include interest expense or income, depreciation and amortization,
selling, general and administrative costs, acquisition and integration costs, stock based
compensation costs or taxes. NOI assists management in assessing profitability and valuation
from principal business activities.
ii. Funds from Operations (“FFO”) – FFO is defined as net income (loss) excluding gains or losses
from the sale of depreciable real estate, plus depreciation and amortization, stock based
compensation expenses, and deferred income taxes; and after adjustments for equity accounted
entities and non-controlling interests. The Corporation believes that FFO can be a beneficial
measure, when combined with primary IFRS measures, to assist in the evaluation of the
Corporation’s ability to generate cash and evaluate its return on investments as it excludes the
effects of real estate amortization and gains and losses from the sale of real estate, all of which are
based on historical cost accounting and which may be of limited significance in evaluating current
ABOUT STORAGEVAULT CANADA INC.
StorageVault owns and operates storage locations in the provinces of British Columbia, Alberta,
Saskatchewan, Manitoba, Ontario, Quebec, and Nova Scotia.
For further information, contact Mr. Steven Scott or Mr. Iqbal Khan:
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information: This news release contains “forward-looking information” within the
meaning of applicable Canadian securities legislation. All statements, other than statements of historical
fact, included herein are forward-looking information. In particular, this news release contains forwardlooking
information in relation to: the proposed Acquisition and proposed Transaction; the potential
closing date for the proposed Acquisition and the proposed Transaction; the satisfaction of the conditions
for completion of the proposed Acquisition and the proposed Transaction; and the issuance of common
shares of StorageVault to satisfy a portion of the purchase price for the proposed Acquisition and the
proposed Transaction. This forward-looking information reflects StorageVault’s current beliefs and is
based on information currently available to StorageVault and on assumptions StorageVault believes are
reasonable. These assumptions include, but are not limited to: the completion of satisfactory due diligence
by StorageVault in relation to the proposed Acquisition and the proposed Transaction; the satisfactory
fulfilment of all of the conditions precedent to the proposed Acquisition and the proposed Transaction; the
receipt of all required approvals for the proposed Acquisition including StorageVault board of directors
approval, acquisition committee approval, TSXV acceptance and other regulatory approvals; the receipt of
all required approvals for the proposed Transaction including TSXV acceptance; the issuance of the
common shares of StorageVault as disclosed above as part of the purchase price for the proposed
Acquisition and the proposed Transaction; market acceptance of the proposed Acquisition and the
proposed Transaction; the value of the appraisals received for the proposed Acquisition; the value of the
assets in relation to the proposed Transaction; and acceptable financing to complete the proposed
Acquisition. Forward looking information is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or achievements of StorageVault to
be materially different from those expressed or implied by such forward-looking information. Such risks
and other factors may include, but are not limited to: general business, economic, competitive, political
and social uncertainties; general capital market conditions and market prices for securities; delay or failure
to receive board or regulatory approvals; the actual results of future operations; competition; changes in
legislation, including environmental legislation, affecting StorageVault; the timing and availability of
external financing on acceptable terms; conclusions of economic evaluations and appraisals; and lack of
qualified, skilled labour or loss of key individuals. A description of additional assumptions used to
develop such forward-looking information and a description of additional risk factors that may cause
actual results to differ materially from forward-looking information can be found in StorageVault’s
disclosure documents on the SEDAR website at www.sedar.com. Although StorageVault has attempted to
identify important factors that could cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause results not to be as anticipated,
estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers
are further cautioned not to place undue reliance on forward-looking information as there can be no
assurance that the plans, intentions or expectations upon which they are placed will occur. Forwardlooking
information contained in this news release is expressly qualified by this cautionary statement. The
forward-looking information contained in this news release represents the expectations of StorageVault as
of the date of this news release and, accordingly, is subject to change after such date. However,
StorageVault expressly disclaims any intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events or otherwise, except as expressly
required by applicable securities law.