Iron Mountain Acquires Cornerstone Records Management
Deal grows company’s storage business in U.S. and expands its roster of mid-sized customers
Iron Mountain® Incorporated has acquired Cornerstone Records Management, growing its core information storage business by adding complementary small and mid-sized organizations to its customer base. The storage and information management firm purchased Cornerstone for approximately $191 million in cash, subject to certain purchase price adjustments.
Cornerstone Records Management provides predominately records storage, along with document shredding and data protection services, to small and mid-sized organizations. The company operates throughout the Mid-Atlantic and Northeast regions of the country as well as in Southern California, Denver and Houston. Altogether, Cornerstone stores and manages nearly 11 million cubic feet of hardcopy documents across 36 leased facilities.
“Acquiring Cornerstone is further example of how we use targeted acquisitions to advance our business strategy,” said William Meaney, president and chief executive officer of Iron Mountain. “In our mature markets like the U.S., selective M&A is one way we seek to expand our market presence, grow rental revenues from our storage business and sustain the durability of our strong cash flows. Cornerstone is a high-quality business that helps us meet these goals by adding a complementary group of small and mid-sized organizations to our customer base.”
Iron Mountain expects limited impact on 2013 results and annualized revenue of $50 to $55 million in 2014 with approximately $20 million in Adjusted OIBDA. Additional Adjusted OIBDA benefits are expected to be realized over time as real estate synergies are achieved. The company will provide additional details on the contribution from recent acquisitions and capital requirements when it provides preliminary 2014 guidance with the reporting of its third quarter results on Oct. 31.
“We welcome the customers of Cornerstone and look forward to serving them,” said Harold Ebbighausen, president of Iron Mountain, North America. “For us, that means not only securing their records, but providing them insights and best practices on how they can manage information with less cost and risk. That’s when we become true business partners.”
Acquisitions are a key component of Iron Mountain’s business strategy to sustain the durability of high-return, mature markets and to establish market leadership in high-growth emerging markets. To that end, the company has completed year-to-date transactions totaling nearly $220 million in established markets of the U.S. and France and $100 million in emerging markets of Brazil, Colombia and Peru, where the company recently completed the acquisition of File Service. File Service stores and manages hardcopy documents and tape cartridges on behalf of nearly 500 customers. The deal was valued at $16 million.