RESTON, V.A. — Iron Mountain Inc. (NYSE: IRM) has agreed to acquire the U.S. operations of IO Data Centers LLC for $1.3 billion. The agreement includes up to an additional $60 million based on future performance.
Iron Mountain will acquire the land and buildings associated with the four state-of-the-art data centers, which total 728,000 square feet. They are situated in Edison, N.J.; Columbus, Ohio; Phoenix; and Scottsdale, Ariz. The centers provide 62 megawatts (MW) of capacity with expansion potential of an additional 77 MW in Arizona and New Jersey.
The portfolio has an average weighted lease term of 3.3 years. The transaction is anticipated to close in January 2018, subject to customary closing conditions.
“The addition of IO’s data centers enhances our geographic diversification and provides market-leading exposure to Phoenix, the fourth fastest market for absorption in the U.S. in 2017, and the 12th largest data center market globally,” says Mark Kidd, senior vice president and general manager of Iron Mountain Data Centers.
“This transaction also enhances our ability to support the needs of the largest cloud providers through new development with expansion capacity in Phoenix as well as New Jersey, another attractive market due to its proximity to the New York metro area,” he added.
IO Data Centers boasts a roster of more than 550 customers. This includes blue chip financial services, aerospace, federal government and technology companies, with no single customer representing more than 10 percent of total revenue. More than 40 percent of IO’s customers are also customers in Iron Mountain’s core records and data management businesses, notes Kidd.
This agreement follows Iron Mountain’s September acquisition of FORTRUST data center, as well as the announcement of Iron Mountain’s international data center expansion through the planned acquisition of two Credit Suisse data centers in London and Singapore.
Iron Mountain’s data center portfolio will total more than 90 MW of existing capacity, with an additional 26 MW of capacity currently under construction. The planned and future expansion potential totals 135 MW, once the Credit Suisse and IO transactions close in early 2018.
Ardea Partners LLC, Evercore and Centerview Partners LLC are serving as financial advisors to Iron Mountain. Morgan, Lewis & Bockius LLP, Sullivan & Worcester, and Weil, Gotshal & Manges LLP are serving as legal counsel to Iron Mountain. Barclays and JP Morgan also served as financial advisors to Iron Mountain on the transaction.
Goldman, Sachs & Co. is serving as financial advisor to IO, while Simpson Thacher & Bartlett LLP is acting as legal counsel.
Reston, Va.-based Iron Mountain provides storage and information management services. It contains a real estate network of more than 85 million square feet across more than 1,400 facilities in 53 countries. The company’s stock price closed at $37.80 per share on Tuesday, Dec. 12, up from $33.16 one year ago.
Phoenix-based IO operates large data center campuses that feature more than 2 million square feet, hundreds of networks and 300 MWs in North America and Singapore.
— Nellie Day