Strategic Storage Growth Trust, Inc. (SSGT) today announced the entry into a definitive merger agreement with Strategic Storage Trust II, Inc. (SST II), pursuant to which SSGT will merge with and into a wholly-owned merger subsidiary of SST II. Under the merger agreement, SSGT stockholders will receive $12.00 per share in cash, which represents a total purchase price of approximately $340 million, including current outstanding debt to be assumed or repaid. The merger agreement was negotiated on behalf of SSGT by an independent special committee of SSGT's board of directors, which was formed to conduct a review of potential strategic alternatives.
The special committee of SSGT's board of directors, the SSGT board of directors, an independent special committee of SST II's board of directors, and the SST II board of directors have each approved the merger agreement. The merger remains subject to the approval of SSGT's stockholders, as well as other customary closing conditions.
"This merger will provide our stockholders full cycle liquidity in an all-cash transaction at $12.00 per share, a price above the most recently announced net asset value," said H. Michael Schwartz, CEO, president and chairman of the board of directors of SSGT. "We are proud of the high quality portfolio of properties we have built and the value it will bring to our stockholders upon the closing of the merger," noted Mr. Schwartz.
The merger is expected to close during the first quarter of 2019, subject to customary closing conditions, including the approval of SSGT's stockholders, who will vote on the transaction at a special meeting on a date to be announced. The transaction is not contingent on receipt of financing by SST II. Under specified circumstances set forth in the merger agreement, SST II will be required to pay SSGT a termination fee of $9.6 million if SST II fails to close the transaction.
The merger agreement also provides SSGT with a go-shop period, during which the special committee of SSGT's board of directors, with the assistance of its financial advisor, KeyBanc Capital Markets, Inc., will actively solicit alternative proposals from third parties for the next 45 days concluding at 11:59 p.m. on November 15, 2018. The merger agreement provides for SSGT to pay a termination fee of $2.9 million to SST II if SSGT terminates the merger agreement in connection with a superior proposal that arises during the go-shop period, and a termination fee of $9.6 million if SSGT terminates the merger agreement in connection with a superior proposal that arises following the go-shop period. There can be no assurance that this process will result in a superior proposal. SSGT does not intend to disclose developments with respect to the solicitation process unless and until the special committee of SSGT's board of directors has made a decision with respect to any potential superior proposal.
KeyBanc Capital Markets, Inc. served as financial advisor, and Bass, Berry & Sims PLC served as legal advisor, to the special committee of SSGT's board of directors. KeyBanc Capital Markets, Inc. also provided a fairness opinion to the special committee of SSGT's board of directors in connection with the transaction.