Iron Mountain to Buy Io Data Centers' U.S. Unit for $1.3 Billion

(Bloomberg) -- Iron Mountain Inc. agreed to acquire the U.S. operations of Io Data Centers LLC for $1.3 billion, adding to a string of deals this year by the data storage and management real estate investment trust.

Io will receive an additional $60 million based on the future performance of the centers, Iron Mountain said in a statement Monday. Iron Mountain is acquiring land and buildings in New Jersey, Ohio and Arizona that provide 62 megawatts of capacity.

The data center market is “super exciting for us,” William L. Meaney, chief executive officer of Iron Mountain, said in an interview. Large enterprises developing their cloud strategies “really fuels the growth of people like ourselves,” he said.

Iron Mountain agreed in July to buy Mag Datacenters LLC, which operates private data center business Fortrust, for about $130 million. In October, it said it was acquiring data centers in Singapore and London from Credit Suisse Group AG in a $100 million transaction.

“We look at a lot of deals but we’re really disciplined,” Meaney said. With the Io assets “we were able to find both the quality of assets and pricing that made sense,” he said.

The purchase of Phoenix-based Io’s U.S. operations will be Iron Mountain’s second biggest deal by valuation, after its 2015 agreement to acquire Recall Holdings Ltd. for about $2.6 billion.

Iron Mountain’s data center business is expected to contribute about 7 percent of its total revenue by 2020, according to the statement. That’s up from just under 2 percent now, Meaney said. The deal is likely to close in January 2018.

Iron Mountain shares closed at $40.70 Monday, valuing the Boston-based company at about $11 billion.

Ardea Partners, Centerview Partners and Evercore Inc. were financial advisers to Iron Mountain on the Io deal, with Morgan Lewis & Bockius LLP, Sullivan & Worcester LLP and Weil Gotshal & Manges LLP providing legal advice.

Goldman Sachs Group Inc. was financial adviser to Io and Simpson Thacher & Bartlett LLP was legal counsel.

Founded in 1951 as Iron Mountain Atomic Storage Inc., the company initially existed to protect documents from war or other disasters by saving them inside a depleted New York iron ore mine. It now provides services including art storage and secure destruction of information to about 230,000 customers in more than 50 countries, according to its website.

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