PSA Expands Into Canada With ~$1.2B Deal

研报英文原文证据摘录

PSA Expands Into Canada With ~$1.2B Deal

(+0.3% - See Exhibit 1) as

synergies are realized, primarily driven by NOI growth. Management expects 30-40% NOI upside

from 1) higher ECRIs, though PSA is not underwriting for similar ECRI practices in Canada as in the

US portfolio, 2) improved occupancy from 83% to the institutional industry average of >90%, 3) some

modest savings on OpEx side, and 4) higher tenant reinsurance income. Based on our assumptions

on the deal, we expect NOI growth to likely meet the $288M in earn-out, which lifts the cost basis to

~$1.49B (modeled below). Overall, we view management underwriting as appropriate, as it captures

a robust increase in revenues from internalization while still leaving room for additional upside (from

OpEx savings not modeled in our accretion math).

Exhibit 1 - PSA Accretion Model From PS Canada Acquisition

Year 1 Pro Forma Maximum Synergy Potential Pro Forma

Income Statement ($M) PSA 2027 PS Canada Pro Forma Comments Pro Forma Comments

Property Revenue 5,127.9 108.0 5,237.4 AssumesSynergies$1.5M in ECRI-driven Revenue 5,250.9 AssumesECRIs and$17Mhigherin occupancyrevenue synergies from

Property Expenses (1,423.4) (37.8) (1,461.2) Assumes no Expense Synergies (1,457.2) AssumesEfficiency$4M in Synergies from Expense

Net Operating Income 3,704.5 70.2 3,776.2 3,793.7

NOI Margin 72.2% 65.0% 72.1% 72.2%

G&A (92.3) (3.5) (95.8) Assumes no Synergies (94.1) Assumes elimination of half PS Canada G&A

Other Income/(Expense) 55.0 - 56.0 Assumesincome $1M growth in tenant reinsurance 60.0 Assumesreinsurance$5Mincometotal synergies from tenant

EBITDA 3,667.2 66.7 3,736.4 3,759.6

EBITDA Margin 71.5% 61.8% 71.3% 71.6%

Interest Expense (399.7) (12.1) (411.8) $310M3.9% ratein incremental Canadian debt issued at (411.8) No change from Y1