StorageVault to Issue $10,000,000 of Shares at $0.80 to Acquire $22 Million Class A Storage Asset in Calgary, Alberta
July 04, 2016
CALGARY, ALBERTA--(Marketwired - July 4, 2016) - STORAGEVAULT CANADA INC. ("StorageVault") (TSX VENTURE:SVI) has entered into an asset purchase agreement executed on June 30, 2016 with a vendor (the "Vendor") to purchase for an aggregate purchase price of $22,000,000, subject to customary adjustments, all of the self storage assets, property and business used in the operation of one Calgary, Alberta area self storage store owned by the Vendor (the "Acquisition"). The Acquisition is an arm's length transaction. It is anticipated that the closing of the Acquisition will occur on or around August 31, 2016. This will be StorageVault's 5th location in the Alberta market.
"This transaction is unique in that we are purchasing from a motivated vendor who is taking $10,000,000 of the purchase price in StorageVault stock at $0.80 cents. It is a premium asset in a top 5 city in Canada, which is partially opened and in lease-up" said Steven Scott, the CEO of StorageVault. "Since StorageVault is in the business of acquiring mature cash flowing assets, Access Self Storage Inc. will step in to mitigate the development and lease up risk. To remove the development risk, Access will provide the construction financing needed to complete the project and will oversee the construction. To remove the lease up risk, Access will enter into a 4 year triple net head lease with StorageVault."
Purchase Price and Payment
The purchase price for the Acquisition is $22,000,000 and is payable as follows: (i) $10,000,000 by the issuance of 12,500,000 common shares of StorageVault at a deemed price of $0.80 per share (the "Payment Shares"); and (ii) $12,000,000 by assumption of the existing first mortgage financing.
Access Lease and Access Agreements
A condition of closing is that StorageVault, as landlord, and Access Self Storage Inc. ("Access"), a major shareholder of StorageVault, as tenant, will execute a four year lease (the "Access Lease") in respect of the entire store.
In addition, for taking on the lease up and development risk, it is a condition of closing that Access will enter into agreements (the "Access Agreements") with the Vendor in respect of: (i) two options (the "Access Options") in favor of Access to purchase up to all of the Payment Shares from the Vendor; (ii) an option which allows the Vendor to terminate the Access Options upon payment of certain of the Payment Shares to Access; (iii) a right of first negotiation for Access with respect to the sale by the Vendor of any of the Payment Shares; and (iv) financing granted by Access to the Vendor of up to $1,250,000 to fund the completion of the construction of certain improvements and remediation of any deficiencies in respect of the store.
Material Conditions Precedent to the Proposed Acquisition
In addition to the conditions described above, 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, satisfactory financing, StorageVault's acquisition committee and board of director approval of the Acquisition and TSX Venture Exchange ("TSXV") acceptance of the Acquisition. The obligations of the Vendor to complete the Acquisition are subject to initial conditions including, but not limited to: satisfactory financing to pay out any balance owing on the existing mortgage that is not assumed by StorageVault, Vendor shareholder approval of the Acquisition, including no more than 5% dissenting shareholders of the Vendor, and TSXV acceptance of the Acquisition. The initial conditions for both parties must be satisfied on or before 30 days after the execution of the purchase agreement. The obligations of both StorageVault and the Vendor to complete the closing of the Acquisition are subject to the satisfaction of other customary closing conditions for transactions similar to the Acquisition.
Exemption from MI 61-101 and TSXV Policy 5.9
The execution of the Access Lease 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 this 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.
Other Information
Completion of the Acquisition is subject to a number of conditions as disclosed above and as set forth in the purchase agreement, including, but not limited to, TSXV acceptance, satisfactory due diligence, acquisition committee and board of director approval, satisfactory financing, Vendor shareholder approval and execution of the Access Agreements. There can be no assurance that the Acquisition will be completed as proposed or at all. The TSXV has in no way passed upon the merits of the Acquisition and has neither approved nor disapproved the contents of this press release.
About StorageVault Canada Inc.
StorageVault owns and operates storage locations in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and Nova Scotia.
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. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", " expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. In particular, this news release contains forward-looking information in relation to: the proposed Acquisition; the business, assets and property of the Vendor in the proposed Acquisition, including the completion of the construction and lease up of the store; the timing for completion of the proposed Acquisition and the satisfaction of the conditions for completion of the proposed Acquisition; the availability of satisfactory financing for the proposed Acquisition and the execution of the Access Lease and the Access Agreements. 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 all parties in relation to the proposed Acquisition; the satisfactory fulfilment of all of the conditions precedent to the proposed Acquisition; the receipt of all required approvals including regulatory, TSXV, third party, creditor, board of directors, acquisition committee and Vendor Shareholder approvals; market acceptance of the proposed Acquisition; acceptable financing to complete the proposed Acquisition; the cost of completion of the construction and the lease up of the store being consistent with historical and typical costs and timeframes for similar stores; and the execution of the Access Lease and the Access Agreements.
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 atwww.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. Forward-looking 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.
Mr. Steven Scott or Mr. Iqbal Khan
1-877-622-0205
ir@storagevaultcanada.com