By Brenon Daly
Adding a major piece to its information management portfolio, Iron Mountain (NYSE:IRM) said Monday that it will hand over $112m in cash for Mimosa Systems. (We noted two weeks ago that the market was buzzing on this possible pairing.) The purchase is the largest by Iron Mountain since its October 2007 acquisition of Stratify, a deal that serves as the basis for the company’s Iron Mountain Digital. (Stratify’s founder now heads up Iron Mountain’s digital business. Incidentally, Mimosa chief executive T.M. Ravi will join Iron Mountain Digital as head of marketing.)
The purchase of Mimosa adds on-premises content archiving to Iron Mountain Digital, and brings it more directly into competition with some of the largest suppliers of information management technology, including two companies that bought their way into the market. In mid-2007, Autonomy Corp (OTC:AUTNF) paid a whopping $375m for Zantaz, and two years ago Dell (NASDAQ:DELL) shelled out $155m for MessageOne. We understand that Dell valued its archiving startup at slightly more than 6x trailing sales, while Autonomy paid about 3.3x trailing sales for Zantaz. According to two sources, Iron Mountain is paying roughly the same multiple that Autonomy paid, valuing Mimosa at about 3.2x its estimated trailing sales of about $32m.