Iron Mountain Gets Connected

Iron Mountain Inc. (NYSE: IRM) fed its appetite for acquisitions today while strengthening its compliance services by purchasing data protection and archiving provider Connected Corp. for $117 million.

That price tag for the cash transaction might seem high, considering privately owned Connected generated just $18 million in revenues over the past six months. However, it does testify to the steady and continuing interest in compliance (see No Brainer: Veritas Buys KVS and Spam Blocker Chomps Email Archiver). It also fills about 70 percent of the hires that records management company Iron Mountain averages per quarter.

Iron Mountain says it expects to retain all 140 Connected employees. "We hire 200 people per quarter," says Peter Delle Donne, president of enterprise solutions and services at Iron Mountain. "We have an insatiable appetite for talented people in engineering and development, sales, marketing, and financial areas."

Indeed, the company has gobbled up more than 100 companies on its way to $1.5 billion in annual revenues. That pace should continue with one to two acquisitions per month, says Delle Donne, including a continued focus on what it calls digital services. Iron Mountain defines digital services as short-term vaulting of transactional data and archiving of digital images and documents.

Iron Mountain and Connected are no strangers. In addition to their close geographic proximity in the Boston area, the two have jointly marketed and sold Connected's PC backup and recovery product, DataProtector, for the past two years.With Connected, Iron Mountain gets a handful of products and services for electronic data storage. One of those products, Connected's recently introduced ArchiveStore, provides email archiving services that overlap with Iron Mountain's subscription-based archive service encompassing a variety of electronic documents and files. Connected got ArchiveStore when it acquired U.K.-based Archive-It last November (see Connected Gets Into Archive).

Iron Mountain's digital services account for 5 percent of its overall revenues, but it hopes to increase that to 8 percent to 10 percent in the near future. The other 95 percent of the company's revenues come from storing and managing physical records.

Brett Mendel, Senior Analyst, Byte and Switch Insider