Iron Mountain Eyes Expansion in Europe, Buys Arhiv Trezor

In a bid to expand into the Croatian market, Iron Mountain Inc. IRM recently announced the acquisition of Zagreb-based Arhiv Trezor. The company has selected Arhiv Trezor for its expansion because the latter has a robust base of customers and enjoys a great reputation.

The expansion into the Croatian market, with the acquisition of Arhiv Trezor, seems a strategic fit for Iron Mountain as this will enable the company to benefit from the rising record and information management business. Further, this will fortify the company’s presence within Southeastern Europe.

Notably, as a result of the application of the General Data Protection Regulation in the European Union, the requirements for data privacy and protection have become extremely stringent. This requires clients to associate themselves with companies who aid them in adhering to the rules, thus increasing business opportunities for companies like Iron Mountain.

Arhiv Trezor, which is a leader in storage and management of records, digitization, protected information destruction and safe transportation, was founded in 2002. The company has also received ISO 9001: 2015 Certification for records and business documentation archiving in Europe.

Per Ernest Cloutier, executive vice president and general manager, International for Iron Mountain, "Acquiring a known market leader like Arhiv Trezor fits our strategy of seeking established local providers that share our commitment to service delivery, trust and security in markets with strong growth trends in information management outsourcing."

Iron Mountain has an aggressive acquisition strategy to drive growth of storage revenues. The company has not only gained new customers from these acquisitions but has also been able to expand operations in international regions such as Greece, China, Hong Kong, Singapore, Switzerland, Australia, Turkey, India, Brazil, China, Colombia and Poland.

The company completed the acquisition of Recall Holdings in May 2016, which has broadened its footprint. Moreover, FORTRUST, Credit Suisse, IO Data Centers LLC and Dutch EvoSwitch data-center acquisitions are in sync with its strategy of expanding the company’s data-center business.

Notably, with growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data-center real estate investment trusts (REIT) are experiencing a boom market. This, along with an improved outlook for economic growth, is anticipated to spur demand for data centers, and offer ample scope for growth to data-center REITs, including Digital Realty DLR, CoreSite Realty Corporation COR and Equinix Inc. EQIX    .

Iron Mountain’s latest endeavors in this space also command appreciation and will likely boost its top-line growth by leveraging on the healthy fundamentals. In fact, aggressive acquisitions, along with a diversified revenue base, a strong product portfolio and cost-cutting initiatives, bode well for long-term growth. Additionally, transformation initiatives and continued strong performance of the company’s storage rental business are positives. However, heavy investments in setting up the company’s data-center business dampen its financials, especially as it already has a highly leveraged balance sheet.

In the past three months, shares of this Zacks Rank #3 (Hold) company have outperformed the industry it belongs to. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has witnessed a rise of 6.1% compared with the industry’s rally of 4.2%.

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