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Terms Announcement in respect of the Acquisition of Stortown in Kwazulu Natal and Withdrawal of Cautionary
Stor-Age Property REIT Limited
Incorporated in the Republic of South Africa
Registration number 2015/168454/06
Share Code: SSS ISIN: ZAE000208963
(Approved as a REIT by the JSE)
(“Stor-Age” or “the Company”)
TERMS ANNOUNCEMENT IN RESPECT OF THE ACQUISITION OF STORTOWN IN KWAZULU
NATAL AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the announcement released on SENS on 8 June 2017 in which they
were advised that Stor-Age had entered into a memorandum of understanding with the
shareholders of DanCor Properties Proprietary Limited (“DanCor”) in terms of which Stor-Age
would acquire 100% of the shares in DanCor (“the Transaction”).
DanCor currently conducts its self storage business from four locations under the name StorTown
(“StorTown”) with properties situated in Brackenhill (two properties), Durban CBD and Durban
North (“the StorTown Properties”).
The board of directors of Stor-Age (“the Board”) is pleased to advise shareholders that Stor-Age
has now entered into a formal agreement in respect of the Transaction.
2. TERMS OF THE TRANSACTION
Stor-Age will, through its wholly-owned subsidiary, Roeland Street Investments Proprietary
Limited (“RSI”), subscribe for 99.9% of the shares in DanCor (“DanCor Shares”) for
R145,000,000 (“Subscription Consideration”). The existing shareholders of DanCor (“Existing
Shareholders”) will retain 0.1% of the DanCor Shares for the immediate future.
The full Subscription Consideration shall be applied to the reduction of third-party debt and loans
owing by DanCor to the Existing Shareholders, including shareholder loans that arose in respect
of disposal agreements entered into by DanCor and the Existing Shareholders pursuant to an
internal restructuring, prior to implementation of the Transaction, in terms of which DanCor
agreed to dispose of its assets not related to its self storage business, to the Existing
Shareholders (“Restructure Agreements”).
3. EFFECTIVE DATE
The effective date of the Transaction shall be the later of 1 November 2017 and the date on which
the last condition precedent to the Transaction has been fulfilled or where possible, waived.
4. RATIONALE FOR THE TRANSACTION
The Board is of the view that the Transaction supports Stor-Age’s stated strategy of pursuing
value-added acquisitions in a fragmented industry in order to strengthen the group’s position as
a premium South African self storage brand.
Implementation of the Transaction will provide Stor-Age with a broader geographical store
offering across the city of Durban in locations which are complimentary to the existing trading
portfolio.
The intention is for all stores to be rebranded and added to Stor-Age’s sophisticated operations
platform, with the majority of the value enhancement planned over time through key initiatives
such as digital marketing, revenue management and increased scale in a key market.
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5. INFORMATION RELATING TO THE STORTOWN PROPERTIES
Information relating to the StorTown Properties is set out below:
Brackenhill Nguni Durban CBD Durban North
Location: Portion 783 of A Portion of Portion 3 of Erf Portion 1 of the
the Farm Upper Portion 740 of 6743 Durban, Farm Lot Option
End of Lange the Farm Upper measuring Site, no. 16038,
Fontein, no. End of Lange 1 454 square measuring
980, Ethekwini, Fontein, no. metres 8 167 square
measuring 980, Ethekwini metres
2.3567 hectares (to be
subdivided)
Rentable area 12 856 m2 2 255 m2 3 294 m2 3 782 m2
(m2):
Allocation of R89,930,070 R11,493,434 R28,190,966 R15,385,530
purchase price
(note 1)
Note 1 - The value attributed to the StorTown Properties (as at the effective date) has been
derived by the Board using the capitalisation of income method. The Board is of the view that the
purchase price allocation as disclosed above represents the Board’s best estimate of the fair
value of the StorTown Properties. No independent valuation has been performed on these
properties.
The aggregate weighted average rental per square metre of all the StorTown Properties acquired
pursuant to the Transaction is R85.00.
6. VALUE OF THE NET ASSETS AND PROFIT ATTRIBUTABLE TO THE NET ASSETS SUBJECT TO THE TRANSACTION
As at 31 August 2017, the value of the net assets that are the subject of the StorTown Properties
was R87.58 million and the net profits attributable to the StorTown properties, for the 12 months
then ended, was R10.25 million.
The net assets and net profits attributable to the StorTown Properties as disclosed above have
been sourced from the unpublished management accounts of DanCor. Whilst the Board has
satisfied itself as to the quality of these management accounts, shareholders are cautioned that
these management accounts have not been audited or reviewed by the auditors of the Company.
7. CONDITIONS PRECEDENT
The Transactions have been approved by the Competition Commission and remain conditional
upon the fulfilment or, where applicable, waiver, of certain further conditions precedent, including:
• approval of the Transaction by the existing shareholders and the board of directors of
DanCor;
• conclusion of the Restructure Agreements;
• approval of the Transaction by the Board and Investment Committee of Stor-Age; and
• obtaining the relevant consents and approvals in respect of the Transaction by the third-
party debt providers, to the extent required.
8. CATEGORISATION
The Transaction constitutes a category 2 transaction in terms of the JSE Listings Requirements.
9. MEMORANDUM OF INCORPORATION
Stor-Age undertakes to ensure that nothing contained in the memorandum of incorporation of
DanCor (or any of its subsidiaries) will frustrate Stor-Age in any way from compliance with its
obligations in terms of the JSE Listings Requirements or relieve Stor-Age from compliance with
the JSE Listings Requirements.
10. WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
As a consequence of the announcement of the salient terms and conditions in respect of the
Transaction, the cautionary announcement is hereby withdrawn. Accordingly, shareholders are
no longer required to exercise caution when dealing in the securities of the Company.
Cape Town
10 October 2017
Corporate Advisor and Sponsor
Questco Corporate Advisory Proprietary Limited
Transaction Attorneys
Cliffe Dekker Hofmeyr
Competition Attorneys
Baker McKenzie LLP
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