Iron Mountain to buy IO Data Centers to expand data center footprint

Iron Mountain Inc. (NYSE: IRM) says it has reached a definitive agreement to acquire the U.S. operations of IO Data Centers LLC, a colocation data center services provider. Iron Mountain purchased the Phoenix, AZ-based IO for $1.315 billion, with an additional $60 million contingent upon future performance and subject to customary adjustments.

Iron Mountain Inc. (NYSE: IRM) says it has reached a definitive agreement to acquire the U.S. operations of IO Data Centers LLC, a colocation data center services provider. Iron Mountain purchased the Phoenix, AZ-based IO for $1.315 billion, with an additional $60 million contingent upon future performance and subject to customary adjustments.

Iron Mountain expects to close the transaction in January 2018, subject to satisfaction of customary closing conditions. Excluding the $60 million potential payments, the $1.315 billion represents a multiple of 15X synergized 2018 EBITDA, post-integration.

Iron Mountain will acquire the land and buildings affiliated with four data centers in Phoenix and Scottsdale, AZ, Edison, NJ, and Columbus, OH. Totaling 728,000 square feet, the existing data center space in the four facilities offers 62 MW of capacity, with the possibility of adding 77 MW combined in the AZ and NJ data centers. All four facilities are built to address the security requirements of highly regulated vertical market segments, and offer access to large power networks with the potential to serve multiple enterprises in the respective data center markets.

Currently, the IO Phoenix campus has a data center capacity of 38 MW (approximately 95% utilization) and an expansion capability through the existing shell of 2 to 3 MW, along with an additional 60 MW on an adjacent 9-acre owned and entitled parcel. With a raised floor with dedicated metro optical network links to the IO Phoenix campus, the IO Scottsdale campus has a current data center capacity of 7 MW (approximately 88% utilization).

The IO New Jersey campus has a data center capacity of 15 MW (approximately 79% utilization) and expansion capability of 15 MW. The 830,000-square-foot building includes about 400,000 square feet of warehouse space for subleasing and is in close proximity to healthcare firms and to Wall Street. The IO Ohio campus has a current data center capacity of 2 MW (approximately 98% utilization).

This agreement follows Iron Mountain's acquisition of the FORTRUST data center in September of this year, and its announcement of the planned acquisition of two Credit Suisse data centers in London and Singapore for expanding its international data center footprint.

After the Credit Suisse closing and IO transactions in early 2018, Iron Mountain's data center portfolio will exceed 90 MW of existing capacity. With 26 MW of further capacity presently under construction, Iron Mountain has plans for expansion potential of another 135 MW.

"We continue to experience strong demand and growth in our data center business, with a focus on establishing a presence in the largest global markets for colocation and enterprise customers," said William L. Meaney, Iron Mountain president and CEO. "Our strategy includes organic expansion within our existing footprint, greenfield development in the largest U.S. markets such as our newly opened campus in Northern Virginia, and targeted acquisitions of properties with customer profiles that closely mirror our own."

Delivering storage and information management services, Iron Mountain has a real estate network of over 85 million square feet throughout more than 1,400 facilities in 53 countries.

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