Iron Mountain Inc.NYSE
Iron Mountain Has A Liquidity Problem
Alpha Gen Capital
Alpha Gen Capital
After The Special Dividend, Iron Mountain Can Deliver A 9% Total Return
Stephen Percoco, CFA
Stephen Percoco, CFA
Wed, Mar. 9, 5:46 PM
- Iron Mountain (NYSE:IRM) has offered to unload most of its Australian operations to win regulatory approval for its planned $2.6B cash/stock acquisition of Australia-based rival Recall Holdings.
- Australia's competition regulator plans to "conduct market testing" related to IRM's offer. IRM would keep its Australian data management business, as well as its Northern Territory records management customers, but sell the rest of its local ops.
- IRM says it still expects the Recall deal, announced in June following months of talks, to close "on or about" May 2.
Jun. 8, 2015, 3:32 PM
- 6 weeks after Iron Mountain (IRM -1%) and Australian rival Recall Holdings agreed in principal to a deal, the companies state they have "entered into a binding Scheme Implementation Deed for Iron Mountain to acquire Recall by way of a recommended court-approved Scheme of Arrangement for an enterprise value of approximately A$3.4 billion (US$2.6 billion) at the current Iron Mountain stock price."
- Recall shareholders will receive 0.1722 Iron Mountain shares + $0.50 in cash for each share they own; they can also opt to receive A$8.50/share in cash, subject to a cap of A$225M ($173M). IRM shareholders will own 79% of the post-merger company, and Recall shareholders 21%.
- The companies forecast eventual net synergies of $155M/year ($110M in 2017, $140M in 2018), and 20% and 25% respective EPS accretion for each firm. The deal is expected to close in early 2016.
- Iron Mountain plans to maintain its current dividend through 2015 and 2016. ~$300M worth of merger integration costs are expected.
Apr. 28, 2015, 2:39 PM
- 4 months after Australian document management/data protection firm Recall Holdings rejected a $1.8B buyout offer from Iron Mountain (IRM +3.1%), it has agreed in principle to a $2B deal. The deal is contingent on "Iron Mountain and Recall conducting confirmatory due diligence and negotiating and executing mutually acceptable merger documentation and other terms and conditions."
- Per the deal terms, Iron Mountain will issue 0.1722 shares for each Recall share, while giving Recall investors the option to receive up to $225M of the payment via A$8.50/share in cash (a 12% premium to Recall's Tuesday close in Sydney).
- IRM/Recall promise the deal will be "highly accretive after year one for both companies shareholders," and yield $125M-$140M/year in synergies thanks to REIT conversion.
- Along with the announcement, IRM has posted its Q1 results. Normalized FFO was $0.50 (below a $0.53 consensus), and revenue was $749M (below a $766.7M consensus, -3% Y/Y).
- AFFO totaled $128M. Storage rental revenue was flat at $458.9M, but service revenue fell 6.7% to $311.2M. Net volume grew 3.5%, and gross margin rose 60 bps to 57.1%.
- Full-year revenue and normalized FFO guidance is still respectively at $3.03B-$3.15B and $2.00-$2.20 (consensus is at $3.11B and $2.16). Likewise, full-year AFFO guidance (new definition) is still at $480M-$520M.
- Q1 earnings slides (.pdf)
Dec. 15, 2014, 7:59 AM
- Recall Holdings rejects Iron Mountain’s (NYSE:IRM) A$2.2B (US$1.8B) takeover bid as too low but says it is open to further discussions if it receives a fresh offer.
- Recall says the A$7/share offer, a premium of 9.4% to Friday's closing price, does not reflect the company’s fundamental value and does not offer its shareholders a fair slice of the potentially US$3.9B in value that could be created through a merger.
Oct. 14, 2014, 6:38 PM
- In a business update detailing its 2014 M&A activity, Iron Mountain (NYSE:IRM) discloses it has bought Keepers Brazil, a provider of record and data protection services for 300+ clients.
- IRM notes Keepers "stores and manages 1.4 million boxes and more than 95,000 tapes across five facilities in Sao Paulo," and that the Brazilian records-management market is "expected to continue to grow in the high single digits annually for the next three to five years."
- Altogether, the company has spent $150M on international acquisitions this year - that figure that includes the buyout of various international JV partners and the purchase of Czech records-management firm ALCZ.
- Bloomberg reported in September IRM is looking to buy Australia's Recall Holdings.
Sep. 29, 2014, 2:06 PM
- A source tells Bloomberg Iron Mountain (IRM +6.2%) may buy Recall Holdings for $2B-$2.5B. That would represent a hefty premium to Recall's current $1.37B market cap.
- Bloomberg also reports "nothing has been decided and the talks may still fall apart." Wooden pallet maker Brambles reportedly drew bids in the $2B range when it put Recall on the block in 2012; it ultimately decided to spin off the business.
- Earlier: Iron Mountain reportedly looking to buy Recall
Sep. 29, 2014, 1:44 PM
- Australia's Recall Holdings, publicly traded in Sydney, is a major rival for Iron Mountain's (IRM +5.1%) document management/data protection business. The company closed overnight trading with a $1.38B market cap.
- Bloomberg reports Iron Mountain is working with Evercore to buy Recall. Shares have popped in response.
Oct. 18, 2013, 8:45 AM
- Iron Mountain (IRM) acquires record storage and shredding/data protection services provider Cornerstone Records Management for $191M in cash.
- Cornerstone operates 36 leased facilities primarily in the Mid-Atlantic and Northeast regions. The acquisition adds "a complementary group of small and mid-sized organizations to [Iron Mountain's] customer base."
- Management expects "limited" impact on 2013 results; in 2014, additional revenue of $50M-$55M and OIBDA of $20M is expected as "real estate synergies are achieved."
May 16, 2011, 6:58 AM