Information storage company Iron Mountain (NYSE:IRM) said on Monday that it has agreed to sell off some of its digital assets to infrastructure software business Autonomy Corporation (LON:AU) for $380 million in cash.
The deal is part of Iron Mountain’s three-year strategic plan to return more money to shareholders, which was announced in April.
As part of the plan, the Boston-based company committed to total stockholder payouts of about $2.2 billion through 2013, including $1.2 billion returned over the next 12 months through share repurchases and dividends.
In addition to selling its digital assets, Iron Mountain also said it plans to optimize its international business and will continue to invest in its North American operations.
Under the terms of the deal announced today, U.K.-based Autonomy will acquire Iron Mountain’s digital archiving, online backup and recovery and eDiscovery services. Iron Montain will retain its software escrow business, which is currently included in its worldwide digital business segment.
Iron Mountain's review of operations was a response to the company coming under fire from hedge fund manager and shareholder, Elliot Management Corp, which for months claimed that Iron had wasted billions on efforts to sell online storage of data, a business it first entered 10 years ago.
Since then, the unit has faced a number of challenges resulting from a rapidly changing environment.
The acquisition by Autonomy, which remains subject to regulatory approvals and other conditions, is expected to be sealed within approximately 45 to 60 days.
Founded in 1951, Iron Mountain manages information assets including business records, electronic files, medical data and emails for organizations around the world.
In pre-market trading on Monday, Iron Mountain’s shares were down 55 cents trading at $32.43 on the New York Stock Exchange.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.