Extra Space Storage Inc. (NYSE:EXR) entered into a definitive merger agreement to acquire Life Storage, Inc. (NYSE:LSI) from State Street Corporation (NYSE:STT), BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc., Wellington Management Company LLP and others for $12.4 billion on April 2, 2023. Under the terms of the agreement, 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 based on Extra Space?s share price close on March 31, 2023. Upon the consummation of the Mergers, each of our outstanding shares of common stock will be converted into the right to receive 0.895 shares of Extra Space common stock, with cash paid in lieu of any fractional shares, without interest. The exchange ratio of 0.895 was fixed in the Merger Agreement and, except for certain adjustments on account of changes in the capitalization of Extra Space or the Company, will not be adjusted for changes in the market prices of either shares of our common stock or shares of Extra Space common stock. The combined company is expected to have a pro forma equity market capitalization of approximately $36 billion and total enterprise value of approximately $47 billion. At closing, Extra Space and Life Storage shareholders are expected to own approximately 65% and 35% of the combined company, respectively. Pursuant to the merger agreement, Eros Merger Sub will merge with and into the Parent Company (the "Company Merger"), with the Parent Company surviving the Company Merger and remaining a wholly owned subsidiary of Extra Space and following certain conversion and contribution transactions, Eros OP Merger Sub will merge with and into the Operating Partnership (the "Partnership Merger" and together with the Company Merger, the "Mergers"), with the Operating Partnership surviving the Partnership Merger and becoming a wholly-owned subsidiary of Extra Space OP. The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, Life Storage may be required to pay to Extra Space a termination fee of $371 million, Extra Space may be required to pay to Life Storage a termination fee of $761 million. If our shareholders vote on, but do not approve, the Company Merger, and the Merger Agreement is thereafter terminated, we may be required to reimburse Extra Space?s transaction expenses up to an amount equal to $20 million. Extra Space will retain its name and continue to trade on the NYSE under the ticker ?EXR?. Kenneth W. Woolley will remain Chairman of the Board and Joseph D. Margolis will remain as CEO and Director. The Extra Space board will be expanded from 10 to 12 directors and will consist of nine directors from Extra Space?s board and three directors from Life Storage.

The transaction is subject to the approval of Extra Space and Life Storage shareholders, listing on the New York Stock Exchange, the Form S-4 to be filed by Extra Space to register the offer and sale of shares of Extra Space Common Stock to be issued in the Company Merger becoming effective, Extra Space shall have received a written tax opinion of Phillips Lytle, Latham & Watkins LLP and Hogan Lovells US LLP, the receipt of certain legal opinions by us and Extra Space, the absence of any temporary restraining order, injunction or other legal order, and no law being enacted, which would have the effect of making illegal or otherwise prohibiting the consummation of the Mergers and satisfaction of other customary closing conditions. The respective boards of directors of both Extra Space and Life Storage have unanimously approved the transaction. Extra Space Storage and Life Storage announced that Extra Space stockholders and Life Storage stockholders have voted, separately, to approve the proposed merger at their respective special meetings held virtually on July 18, 2023. The transaction is currently expected to close in the second half of 2023. As of June 6, 2023, the transaction is expected to close in July or August 2023. The transaction is expected to be accretive to core FFO per share (a non-GAAP measure) within the first year following closing. As per filling on July 18, 2023, The transaction is expected to close on July 20, 2023.

Citigroup Global Markets Inc. acted as lead financial advisor and Anthony Gostanian, Pardis Zomorodi, Eric Cho, Holly Bauer, Laura Szarmach, Achraf Farraj, Greg Rodgers, Kenneth Askin, Chris Norton, Arielle Singh, Robert Brown, Jason Cruise, Craig M. Garner and Kevin C. Reyes of Latham & Watkins LLP acted as legal advisors to Extra Space. J.P. Morgan Securities LLC acted as a financial advisor to Extra Space. Wells Fargo Securities and BofA Securities acted as financial advisors and Joseph Gilligan, Bruce Gilchrist, Les Reese and Katherine Keeley of Hogan Lovells US LLP and Quinn Emanuel Urquhart & Sullivan LLP acted as legal advisors to Life Storage. David J. Murray of Phillips Lytle LLP acted as legal advisor to Life Storage. Citigroup Global Markets Inc. acted as fairness opinion provider to Extra Space. Wells Fargo Securities, LLC and BofA Securities, Inc acted as fairness opinion provider to Life Storage. David P. Slotkin of Morrison & Foerster LLP acted as legal advisor to Citigroup Global Markets Inc. Innisfree M&A Incorporated acted as proxy solicitor for Life Storage. MacKenzie Partners acted as proxy solicitor to Extra Space and will receive a fee of $25,000. Extra Space has agreed to pay Citi an aggregate fee of $18 million, of which $2 million was payable upon delivery of Citi?s opinion and $16 million is payable contingent upon consummation of the merger. Life Storage has agreed to pay BofA Securities an aggregate fee of $15 million, $2 million of which was payable upon the delivery of its opinion and the remainder of which is contingent upon the completion of the merger. Life Storage will pay Innisfree reasonable and customary compensation, including a $75,000 retainer fee covering the first month of services, $40,000 per month thereafter. American Stock Transfer & Trust Company acted as transfer agent and registrar for Extra Space.

Extra Space Storage Inc. (NYSE:EXR) completed the acquisition of Life Storage, Inc. (NYSE:LSI) from State Street Corporation (NYSE:STT), BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc., Wellington Management Company LLP and others on July 20, 2023. Extra Space paid off $32,000 in secured loans and retired $1,160,000 in balances on Life Storage's line of credit.
In connection with the completion of the merger, the Extra Space board has expanded from 10 to 13 directors with the addition of three new directors designated by Life Storage: Mark G. Barberio, Joseph V. Saffire, and Susan Harnett.