Case | HBS Case Collection | March 2004 (Revised May 2005)

Shurgard Self-Storage: Expansion to Europe

by Richard G. Hamermesh and Indra Reinbergs


Shurgard, a U.S.-based firm that rents storage facilities to consumers and small businesses, is considering financing options for rapid expansion of its European operations. Five years after entering Europe, Shurgard Europe has opened 17 facilities in Belgium, France, and Sweden. Along the way, Shurgard has encountered skepticism from both European consumers and investors about the unfamiliar self-storage concept and internal debates on how much to adapt the U.S. business model to European lifestyles. Wall Street analysts also do not value the impact that the European expansion could have on Shurgard's U.S. performance as a publicly traded Real Estate Investment Trust (REIT). As an alternative, to finance this expansion, Shurgard received a proposed deal from a consortium of banks and other investors where they would provide private equity financing spaced over the next few years plus a line of credit. In return, the investors would receive a large share of Shurgard's equity and control of its board, which could force a public offering in less than two years. The decision focuses on whether Shurgard Europe should accept the conditions and valuation of the proposed deal or seek another deal at a later point in time. Students must assess whether the self-storage business model can deliver the growth rate in Europe that the company has promised his potential investors. Involves calculating some basic estimates of the company's value from financial exhibits (enterprise value using a pEBITDA multiple). Main focus is to assess this as an entrepreneurial venture. Students do not need to be familiar with REITs.

Keywords: Private Equity; Valuation; Business Model; Governing and Advisory Boards; Entrepreneurship; Cross-Cultural and Cross-Border Issues; Service Industry; Belgium; France; Sweden; United States; Europe;


Hamermesh, Richard G., and Indra Reinbergs. "Shurgard Self-Storage: Expansion to Europe." Harvard Business School Case 804-112, March 2004. (Revised May 2005.)