StorageVault Canada Inc.
TSX VENTURE : SVI

May 25, 2010 08:00 ET

StorageVault Announces the Signing of a Term Sheet With Canstore Self Storage LP and Termination of the Proof of Concept Agreement With Conundrum Capital Corporation

REGINA, SASKATCHEWAN--(Marketwire - May 25, 2010) - STORAGEVAULT CANADA INC. ("StorageVault") (TSX VENTURE:SVI) -StorageVault is pleased to announce the signing of a Term Sheet with Conundrum Capital Corporation and Canstore Self Storage LP ("CSSLP"), a fund managed by Conundrum. Subsequent to discussions that have occurred between StorageVault and CSSLP (jointly referred to as the "Parties") the Parties have agreed upon key indicative terms under which they will pursue a portable storage ("PUPS") strategy at CSSLP's Kanata and North Peterborough fixed unit self storage properties (the "Investment Properties").

About the Term Sheet

CSSLP will fund all related infrastructure and capital expenditures related to the establishment of PUPS at the Investment Properties. StorageVault will purchase a 15% interest in the Investment Properties by way of acquisition of 15% of the limited partnership units in the limited partnerships, (wholly owned by CSSLP), which own the Investment Properties, and will also retain a 15% carried equity interest in PUPS at both locations. StorageVault will also receive a franchise royalty of 3.5% of the PUPS gross revenue generated from the Investment Properties. StorageVault will have an option to purchase the Investment Properties on or before December 31, 2013 and a right of first refusal to purchase the Investment Properties until December 31, 2014.

The Term Sheet outlines arrangements under which StorageVault will manage the Investment Properties together with four additional CSSLP properties located in Ontario in return for a management fee equal to 5% of gross revenues (including PUPS revenue) from each of the CSSLP properties.

The key indicative terms set out in the Term Sheet are not an exhaustive description or comprehensive understanding of all matters relative to a potential business relationship contemplated therein among CSSLP and StorageVault, the Term Sheet is subject to and conditional upon the negotiation and execution of definitive agreements on these matters, and is also conditional upon the Parties obtaining the approval of their respective investors, shareholders, boards of directors, and TSX Venture Exchange, as applicable.

Termination of Proof of Concept Agreement

StorageVault is also announcing that it will terminate the Proof of Concept Agreement with Conundrum Capital Corporation at AMJ Self Storage in Kanata as previously announced in a press release dated May 28, 2009. The proof of concept attained the required measurable operational benchmarks to be deemed a success, however, Conundrum Capital Corporation and StorageVault were unable to negotiate a mutually beneficial financing and funding arrangement as originally contemplated. StorageVault continues to manage CSSLP's AMJ Self Storage facility and the PUPS operations located in Kanata on a month to month basis. In the event the Parties are unable to finalize the above mentioned definitive agreements, StorageVault will reacquire the PUPS assets in Kanata under the terms and conditions as described in the press release dated May 28, 2009.

About StorageVault Canada Inc.

StorageVault currently owns and operates Trans Can Mini-Stor in Regina, Kenaston Self Storage in Winnipeg and B&B Mini Storage in Cambridge Ontario. Both the Regina and Winnipeg fixed unit storage facilities operate in conjunction with high margin Canadian PUPS portable storage franchises at each location. StorageVault plans to establish a PUPS franchise in Cambridge, and also operates a stand-alone PUPS franchise in Saskatoon, Saskatchewan. StorageVault intends to continue to grow its business through the acquisition of additional self-storage properties and organically as master franchisee through the development of Canadian PUPS portable storage facilities in Canada. The common shares of StorageVault are listed on the TSX Venture Exchange.

About Conundrum Capital Corporation and Canstore Self Storage LP

Conundrum is a private equity management firm focused on delivering innovative real estate investments for major pension plans, financial institutions and high net worth investors.

Forward-Looking Information: This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such forward-looking information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in StorageVault's disclosure documents on the SEDAR website at www.sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this news release.

Contact Information

  • StorageVault Canada Inc.
    Alan Simpson
    President, CEO and Director
    (306) 536-3771 or (306) 546-5999