Bridgepoint Capital, the London-based mid-market private equity firm, has launched a recommended offer for AIM-listed Safestore plc, a provider of self-storage services to the UK market.
Bridgepoint has offered 44 pence per share for Safestore, valuing the business at £39.8m. Bridgepoint is backing a management team led by Stephen Williams and Richard Hodsden, both of whom are directors of Safestore.
The offer, which equates to a premium of 16 per cent above the Safestore share price prior to the announcement of discussions between the two groups, has been recommended by the Safestore board and by shareholders representing 67 per cent of the issued share capital.
Safestore has 23 stores, principally in London and the South East. According to a statement issued by Bridgepoint, growth of the company is expected to be organic with further roll-out and acquisitions, given the fragmented nature of the UK self storage market. Safestore has expanded considerably over the past four years, and according to a Bridgepoint spokesperson, the growth strategy has already started to pay dividends.
The self-storage market in the UK is currently worth £200m per year, with around 400 stores currently in operation.
“The self-storage market is growing strongly but remains underdeveloped in the UK,” said Bridgepoint director Alan Payne. “Safestore’s management can now move forward to exploit the opportunity and roll out their proven model to a wider market both organically and by selective acquisition.”
Commenting on behalf of the independent directors, Giles Clarke, chairman of Safestore, said: “It is extremely difficult for smaller businesses quoted on AIM to provide stock liquidity and value to shareholders, unless they are prepared to consider takeover approaches. This approach recognises the latent value within the business and provides an attractive opportunity for shareholders to realise value today.”
Belazure Acquisition Limited, the acquisition vehicle set up by Bridgepoint to launch the offer, has secured debt financing from NatWest worth £22.5m in addition to a bridging facility of £2.7m. Bridgepoint is looking to invest a total of £18.8m, with management providing £220,000.
Shareholders in Safestore have 21 days to accept the offer. Bridgepoint requires acceptances on behalf of more than 90 per cent of Safestore’s issued share capital in order for the offer to become unconditional.