After raising over $100 million in debt and equity during fiscal 2016, StorageVault Canada (TSX-V:SVI) obviously plans on expanding. In March, the company said, “Our focus continues to be growing cash flow through improved operations, acquisitions and expansion.” They should have put the word “acquisitions” in bold or underlined it or something to demonstrate just how aggressive management would remain on that front, in the unlikely event an investor happened to miss it.
It’s almost unheard of how aggressive the Toronto-based company is snapping up rivals and growing its storage-unit footprint across the country.
After $178.4 million in acquisitions in 2016, Storage Vault at the end of March said it intends to invest another $60 million to $90 million on buyouts in 2017. That’s, of course, outside of “any large portfolio acquisitions,” such as the $396.6 million acquisition of Sentinel Storage announced on March 22.
Management has been holding true to its words, spending $5.825 million for three stores in Kamloops in June and a combined $16.6 million to acquire a store in Montreal and another in the greater Montreal area in May. Monday morning, the company said it used $8 million in cash on hand to complete the acquisition of the latter.
The next step in the buyout strategy was also disclosed Monday. StorageVault also said that it is negotiating with its major shareholder, Access Self Storage, and one of its subsidiaries to acquire six more stores for $34.2 million. The stores span the eastern half of Canada, including Toronto, Quebec and Nova Scotia.
That’s $56.625 million since providing guidance and within the target range including other purchases before delivering the forecast in March.
There’s no denying the uptrend since StorageVault began active trading about a year ago. Those that won’t fight the trend likely see the stock as topping $3 in the near future. Those with a more of a bearish thesis can certainly argue the $800 million valuation, lack of profits and rapid rate of mergers could have the company a little far out over its skis.
Looks like the market is at a stalemate on the fundamentals in Monday trading, with shares of SVI basically flat at $2.70 as the afternoon session moves towards a close.
