Iron Mountain, a global provider of storage and information management services, has acquired the U.S. operations of IO Data Centers – a leading colocation data center services provider based in Phoenix, Arizona. Iron Mountain paid $1.315 billion for the colocation company plus up to $60 million based on future performance and subject to customary adjustments.
With the transaction, Iron Mountain will acquire the land and buildings associated with four “state-of-the-art” colocation data centers in Phoenix and Scottsdale, Arizona; Edison, New Jersey; and Columbus, Ohio. The existing data center space in the four owned facilities totals 728,000 square feet, providing 62 megawatts (MW) of colocation capacity with expansion potential of an additional 77 MW in Arizona and New Jersey.
“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,” said Iron Mountain President and CEO William L. Meaney. “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. We believe we can add significant value to IO’s U.S. operations by leveraging our strong brand that is synonymous with security and trust, and our relationships with more than 30,000 North American data management customers.”
This agreement follows the acquisition of FORTRUST data center on September 1, 2017 and the announcement of Iron Mountain’s international data center expansion through the planned acquisition of two Credit Suisse data centers in the London and Singapore markets. Upon closing of the Credit Suisse and IO transactions in early 2018, Iron Mountain’s data center portfolio will total more than 90 MW of existing power capacity, with an additional 26 MW of capacity currently under construction and planned and future expansion potential of another 135 MW.
Data Centers Phoenix
“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,” said Mark Kidd, Senior Vice President and General Manager, Iron Mountain Data Centers. “Colocation and cloud providers have made significant investments in Phoenix in the past few years, as it boasts diverse energy sources and relatively inexpensive green power, as well as an attractive business environment. 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.”
“Additionally, IO brings a diversified roster of more than 550 customers that includes blue chip financial services, aerospace, federal government and technology companies among its Top 10, with no single customer representing more than 10% of total revenue,” added Mr. Kidd. “Its strong enterprise and cloud customer base is complementary to that of our existing data center business, and more than 40% of IO’s customers are also customers in our core records and data management businesses.”