More Acquisitions for Iron Mountain - Analyst Blog
May 16 2013 - 1:50PM
Zacks
In a bid to strengthen its storage business, Iron
Mountain (IRM) recently acquired three record management
companies from Information Storage Consolidation Company ("ISCC")
namely Safe Records Center, Archives USA and The Document Bank.
These acquisitions expand Iron Mountain’s presence in Michigan
and strengthen its position in Dallas and Florida. Moreover, Iron
Mountain would gain approximately 1000 customers from the current
acquisitions.
Iron Mountain has been pursuing an aggressive acquisition
strategy to supplement organic revenues from the storage business.
Some of Iron Mountain’s recent acquisitions include Datastore and
Data Technology Services in Jan 2013 and IG2 Data Security Inc.,
DATAPROS Storage and Staffing LLC, and Data Backup Inc in late
2012.
We believe that the company will continue to pursue accretive
acquisitions in this segment. Storage is an integral part of Iron
Mountain’s revenue structure and contributes nearly 57% to its
total revenue. Iron Mountain recorded a 4% increase in revenues
from storage in the first quarter.
We expect Iron Mountain to drive significant growth through
acquisitions in the fast-growing countries like Brazil, Russia,
China and India, which will boost its international revenues, 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 a promising international business.
Moreover, competition from Hertz Global
Holdings (HTZ), Pitney Bowes Inc (PBI)
and Guidance Software Inc (GUID) are the other
headwinds.
Currently, Iron Mountain carries a Zacks Rank #3 (Hold).
GUIDANCE SOFTWR (GUID): Free Stock Analysis Report
HERTZ GLBL HLDG (HTZ): Free Stock Analysis Report
IRON MOUNTAIN (IRM): Free Stock Analysis Report
PITNEY BOWES IN (PBI): Free Stock Analysis Report
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