In a bid to strengthen its storage business,
Iron Mountain Inc.
) has acquired three companies - IG2 Data Security Inc., DATAPROS
Storage and Staffing LLC, and Data Backup Inc. All these three
companies provide data storage and protection. However, further
details not disclosed.
IG2 Data Security provides data protection and backup tape
storage services to its clients in Chicago, northwest Indiana and
southeastern Wisconsin. In the Phoenix region, DATAPROS Storage
and Staffing LLC offers media storage and management services,
which also includes data protection. Data Backup Inc. is based in
Sarasota and delivers data storage and recovery services.
Iron Mountain has been employing an aggressive acquisition
strategy to supplement the organic growth in storage revenues.
Iron Mountain has not only gained new customers from these
acquisitions, but has also been able to expand its operations in
In mid 2012, Iron Mountain made several accretive acquisitions
in the storage space (File House Offsite Record Storage, Document
Systems Inc and First National Safe Deposit). We believe that the
company will continue to pursue accretive acquisitions in this
segment (both domestically and internationally) over the long
Storage is an integral part of Iron Mountain's revenue
structure and contributes nearly 58% of its total revenue. In the
last concluded quarter, Iron Mountain recorded marginal growth of
1.7% year over year.
We expect Iron Mountain to drive significant growth through
acquisitions in fast-growing countries like Brazil, Russia, China
and India, which will boost its international revenue going
forward. We believe that diversification and expansion of its
business will help the company to counter sluggish growth from
the domestic and European markets over the long term.
However, tepid internal growth coupled with volatile foreign
exchange rates and a decline in recycled paper prices are
expected to partially negate the company's strong product
portfolio, increasing market share and promising international
business. The company also faces stiff competition from Anacomp
Thus, we have a Neutral recommendation on the stock.
Currently, Iron Mountain has a Zacks #3 Rank (Hold).
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