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

Shurgard Self-Storage: Expansion to Europe

by Richard G. Hamermesh and Indra Reinbergs

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Abstract

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;

Format: Print 28 pages EducatorsPurchase

Citation:

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

Related Work

  1. Case | HBS Case Collection | February 2010

    Shurgard Self-Storage: Expansion to Europe (Abridged)

    Richard G. Hamermesh

    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 its potential investors. Involves calculating some basic estimates of the company's value from financial exhibits (enterprise value using an EBITDA multiple). Main focus is to assess this as an entrepreneurial venture. Students do not need to be familiar with REITs.

    Keywords: Business Model; Business Growth and Maturation; Multinational Firms and Management; Logistics; Corporate Entrepreneurship; Trade; Equity; Corporate Finance; United States; Europe;

    Citation:

    Hamermesh, Richard G. "Shurgard Self-Storage: Expansion to Europe (Abridged)." Harvard Business School Case 810-102, February 2010.  View Details
    CiteView DetailsEducatorsPurchase Related

About the Author

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Richard G. Hamermesh
Baker Foundation Professor of Management Practice, MBA Class of 1961 Professor of Management Practice, Retired
Entrepreneurial Management

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    Hamermesh, Richard G., Kathy Giusti, and Sarah Gulick. "Dementia Discovery Fund." Harvard Business School Case 820-045, September 2019.  View Details
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    Hamermesh, Richard G., Robert S. Huckman, and Julia Kelley. "Intermountain Healthcare: Pursuing Precision Medicine." Harvard Business School Teaching Note 820-019, July 2019.  View Details
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  • Case | HBS Case Collection | April 2018 (Revised September 2018)

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    Citation:

    Hamermesh, Richard G., and Matthew G. Preble. "Impact Investing for Cancer." Harvard Business School Case 818-068, April 2018. (Revised September 2018.)  View Details
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