Blog Exposure – Iron Mountain Expands Presence across European Data Center Market with Acquisition of EvoSwitch NL

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LONDON, UK / ACCESSWIRE / June 1, 2018 / If you want access to our free research report on Iron Mountain Inc. (NYSE: IRM) (“IRM”), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=IRM as the Company’s latest news hit the wire. On May 30, 2018, the Company disclosed the acquisition of EvoSwitch Netherlands B.V and EvoSwitch Global Services B.V. (jointly referred to as “EvoSwitch NL”). The deal is valued at €205 million (approximately $235 million). The acquisition will allow IRM to add a total potential data center capacity of 34 megawatts (MW). Out of this, nearly 11 MW is from 100% leased and existing data center capacity in the Netherlands, and which has the potential to be expanded by 23 MW. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Management Quotes

Commenting on the acquisition, Mark Kidd, Senior Vice President (SVP) and General Manager (GM) of Iron Mountain Data Centers, said:

“EvoSwitch NL’s focus on security, energy efficiency, and its solid track record of continuous uptime is a great fit with our existing data center organization. When combined with current and potential capacity in Iron Mountain’s existing data center portfolio, our total portfolio now represents more than 285 MW across many of the most attractive and highest net absorption markets in the US and globally.”

Eric Boonstra, Chief Executive Officer (CEO) of EvoSwitch NL, added:

“This transaction represents an opportunity for us to extend relationships with our existing customers by providing data center expansion capacity in important continental European markets, and the potential to provide capacity in the important Amsterdam region to Iron Mountain’s legacy data center customer base.”

Con Zwinkels, Founder and CEO of Leaseweb Netherlands B.V., one of the largest customers of EvoSwitch NL, stated:

“Through this transaction, Leaseweb has improved access to a broad portfolio that includes Iron Mountain’s data centers around the globe. We are pleased to be partnering with a Company that has such a strong reputation for security and reliability.”

Transaction Details

IRM has agreed to pay €205 million (approximately $235 million) for the data center business of EvoSwitch NL. The transaction also includes a $25 million in future revenue credit to Leaseweb, which Leaseweb can use for any future expansion and while leasing any new data centers of IRM across the globe. The revenue credit to Leaseweb is valid before June 2028, and is subject to certain terms.

The acquisition will allow IRM to have a stabilized net operating income yield of 12% – 13% once the EvoSwitch NL locations are built – out and leased to their full expansion capability. The current capacity of EvoSwitch NL is expected to result in annualized revenues of approximately $30 million at mid-50% adjusted EBITDA margins. The transaction is expected to marginally dilute IRM’s adjusted funds from operations (AFFO) by approximately 0.5% in FY18. However, the deal is expected to be accretive to IRM in FY19 once the businesses of both Companies are integrated. The Company plans to finance the acquisition via fresh debt.

IRM has explained that the current acquisition is not a part of the Company’s previously disclosed 2020 plan. However, the deal will enable the Company to achieve its goal of accelerated revenue and adjusted EBITDA growth as it transitions to faster-growing, higher-margin businesses. The Company has clarified that it will continue to focus on reducing its lease-adjusted leverage ratio to the mid-5x range by end of FY18. The Company is also committed to its 2020 plan which envisions the reduction of its leverage ratio to approximately 5x, and lowering its dividend pay-out as a percentage of AFFO to 70% – 75%. This is on the assumption that the annual dividend per share grows around 4%.

Benefits of Acquiring EvoSwitch NL to Iron Mountain

Founded in 2007, Amsterdam, The Netherlands-based EvoSwitch NL is part of the Ocom Group. It is one of the largest privately-owned internet services Company in Europe, and the first carbon and carrier-neutral data center in The Netherlands. The Company provides multi-tenant data center space, operating one of the largest colocation facilities centers in the Metropolitan Region Amsterdam (MRA). The MRA is a critical node in the Frankfurt, London, Amsterdam, and Paris (FLAP) data center market. The MRA is the second largest data center market in Europe and a Top 5 in global market. IRM will be able to expand its presence across the FLAP market. The deal complements its data center facility in London which it acquired from Credit Suisse in October 2017. The MRA region has the lowest average energy prices and the most reliable energy grid among FLAP markets. Since EvoSwitch NL uses 100% renewable energy sources like wind, hydro, and biomass power, the acquisition will allow IRM to offset 100% of its data center carbon footprint.

The deal will allow IRM to expand its customer base to include EvoSwitch NL’s global customers, including multinational enterprises, cloud service providers, and public-sector institutions. Leaseweb is one of the largest customer of EvoSwitch NL and has a 10-year lease agreement and contributes approximately 45% to the Company’s contracted revenues. This client will become one of the top 5 customers of IRM and will exclusively contribute to over 15% to IRM’s total revenues.

IRM will acquire two locations in the MRA as a result of the current acquisition, which have a total potential capacity of 34 MW. The first location is a state-of-the-art facility with 150,000 square feet area and nearly 27 MW of total potential capacity. This location is being expanded to accommodate a further 2 MW, out of which nearly 600 kilowatts (KW) capacity has been preleased to Leaseweb. This location can be expanded to a total of 430,000 square feet, which can accommodate additional data halls totaling 14 MW. The second location can support a 57,000 square-foot facility, including 41,000 square feet of data hall development. The site can be expanded by another 7 MW capacity.

About Iron Mountain Inc.

Founded in 1951, Boston, Massachusetts-based IRM is a global leader for storage and information management services. The solutions provided by the Company include information management, digital transformation, secure storage, secure destruction, as well as data centers, cloud services, art storage, and logistics. The Company is trusted by over 225,000 organizations worldwide. It has 1,400 facilities spread over 85 million square feet in over 50 countries.

Stock Performance Snapshot

May 31, 2018 – At Thursday’s closing bell, Iron Mountain’s stock slightly fell 0.63%, ending the trading session at $33.29.

Volume traded for the day: 3.08 million shares, which was above the 3-month average volume of 1.60 million shares.

Stock performance in the previous three-month period – up 5.25%

After yesterday’s close, Iron Mountain’s market cap was at $9.52 billion.

Price to Earnings (P/E) ratio was at 52.43.

The stock has a dividend yield of 7.06%.

The stock is part of the Technology sector, categorized under the Business Software & Services industry. This sector was up 0.1% at the end of the session.

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