Iron Mountain Forges US Expansion with $1.3B Deal – Commercial Property Executive

One of Iron Mountain's recently acquired data centers at 615 N. 48th St. in Phoenix
One of Iron Mountain’s recently acquired data centers at 615 N. 48th St. in Phoenix

Iron Mountain, a leading storage and information management services company, continues its expansion into the data center market with the planned $1.3 billion acquisition of the U.S. operations of Phoenix-based IO Data Centers LLC.

The announcement comes about three months after the Boston-based company opened its fifth data center in the United States in Manassas, Va. The company invested more than $80 million in the 165,000-square-foot and 10.5-megawatt facility, the first phase of the Northern Virginia project. A total investment of more than $350 million in four data centers is planned there.

With the IO Data Centers deal, Iron Mountain will acquire the land and buildings of four data centers in Phoenix and Scottsdale, Ariz.; Edison, N.J.; and Columbus, Ohio. The existing data center space in the four facilities totals 728,000 square feet and provides 62 megawatts of capacity with expansion potential of an additional 77 MW in Arizona and New Jersey.

More Data Center Deals

This agreement follows the acquisition of FORTRUST, a Denver colocation provider and its 210,000-square-foot data center, on Sept. 1 and the announcement in October that Iron Mountain was expanding outside the U.S. with the planned purchase of two Credit Suisse data centers in London and Singapore.

When the IO and Credit Suisse deals close in early 2018, Iron Mountain’s data center portfolio will total more than 90 MW of existing capacity with an additional 26 MW of capacity under construction and planned and future expansion potential of another 135 MW.

“We continue to experience strong demand and growth in our data center business, with a focus on establishing a presence in the largest global markets for colocation and enterprise customers. Our strategy includes organic expansion within our existing footprint, greenfield development in the largest U.S. markets such as our newly opened campus in Northern Virginia, and targeted acquisitions of properties with customer profiles that closely mirror our own,” William Meaney, president & CEO of Iron Mountain, said in a prepared statement.

Mark Kidd, senior vice president & general manager, Iron Mountain Data Centers, said the IO deal will add more than 550 customers that include blue chip financial services, aerospace, federal government and technology companies.

“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,” Kidd said in prepared remarks.

“Importantly, 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,” Kidd added.

Ardea Partners LLC, Evercore and Centerview Partners LLC are serving as financial advisors to Iron Mountain. Morgan, Lewis & Bockius LLP, Sullivan & Worcester, Weil, Gotshal & Manges LLP are serving as legal counsel to Iron Mountain.

Goldman, Sachs & Co. is IO’s financial advisor and Simpson Thacher & Bartlett LLP is providing legal counsel to IO for the transaction.

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