UK Self-Storage Operator Big Yellow Raises Funds Via Share Placing to Buy Out Pramerica

U.K. self-storage operator Big Yellow Group PLC has made a stock placement of 14.35 million ordinary shares to raise enough capital to buy out joint-venture partner Pramerica Real Estate Investors, the U.S.-based real estate investment management business of Prudential, according to the source.

Pramerica is part of a joint venture called The Big Yellow Limited Partnership that dates back to November 2007. The company owns two-thirds of 11 self-storage facilities in the English communities of Birmingham, Camberley, High Wycombe, Leeds, Liverpool, Nottingham, Poole, Reading, Stockport and Sheffield (two locations), as well as one facility in Edinburgh, Scotland. Big Yellow plans to pay £39.25 million to buy out Pramerica, the source reported.

Thus far, the placement has raised £79 million before expenses, according to “The Financial Times,” which also reported that the total number of shares available represents 10 percent of Big Yellow’s existing share capital.

“The placing has been successful, and we are grateful to our shareholders for their support,” Nicholas Vetch, executive chairman, said in a released statement. “These proceeds will be used to take advantage of the opportunity to employ more capital into prime Big Yellow-branded assets and consolidate our position as the leading U.K. self-storage brand.”

The fundraising comes on the heels of encouraging financial results for the six months that ended Sept. 30. Big Yellow reported an 11 percent increase in revenue to £39.9 million, compared to the same period a year ago. Adjusted profit before tax rose 29 percent to £18.4 million, according to the source.

Big Yellow Group operates 78 self-storage locations in the United Kingdom under the Big Yellow Self Storage and Armadillo Self Storage brand names, with most concentrated in Greater London. Its total portfolio comprises 4.9 million square feet.