On June 19, 2024, Padlock Partners UK Fund I, II, and III (the "Padlock Funds") announced the consolidation of their assets through the acquisition of Fund II and Fund III by Fund I via a plan of arrangement. This consolidation will create a unified fund named Padlock Euro Storage Fund I ("Merged Fund"). The transaction, valued at approximately $238 million (GBP 140 million), aims to enhance unitholder value, optimize operations, and provide geographic diversification.

The Merged Fund will comprise 15 properties with a total maximum lettable area of 615,392 square feet, located in prime UK markets. These properties are expected to benefit from favorable demographic trends, strong employment growth, and increasing population. Additionally, the Merged Fund plans to acquire properties in Spain, targeting a 10-12% pre-tax, pre-carried interest internal rate of return.

Legal advisors for the Padlock Funds include Blake, Cassels & Graydon LLP and Wildeboer Dellelce LLP, while CIBC World Markets Inc. served as the exclusive financial advisor. The Merged Fund will maintain the current management team, leveraging their proven track record of value creation.

Unitholders will vote on the arrangement in July 2024. Approval requires a 66 2/3% majority and, subject to a discretionary exemption, a majority of votes by disinterested unitholders. The arrangement is expected to complete in late July 2024, contingent upon court approval and other conditions.

The Merged Fund will target a 6.0% annual pre-tax distribution yield per unit and aims to unlock cost efficiencies, streamline administrative processes, and reduce overhead expenses.