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Extra Space Storage Inc

EXR: XNYS (USA)
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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation
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Extra Space Storage Acquires Life Storage in All-Stock Deal; We Maintain Our $177 FVE

No-moat-rated Extra Space Storage has entered into a definitive merger agreement to acquire Life Storage in an all-stock deal. Life Storage shareholders will receive 0.8950 of an Extra Space share for each Life Storage share they own, representing a total consideration of approximately $145.82 per share as per Extra Space's share price on March 31, 2023. The combined entity will have an enterprise value of approximately $47 billion and 65% of the combined entity will be owned by Extra Space's shareholders. The combined entity will become the largest self-storage operator in the United States, with over 3,500 locations and 264 million square feet. The transaction is expected to be accretive to core FFO per share within the first year of closing and be leverage neutral for Extra Space's shareholders. We do not plan to materially change our $177 fair value estimate for Extra Space Storage.

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