Iron Mountain Reels in RMS

Iron Mountain has continued its acquisition tear, grabbing records management specialist RMS Services for an undisclosed fee today in an attempt to boost its electronic records story.

RMS is one of a number of vendors that digitizes files and medical images so they can be turned into electronic medical records. With healthcare organizations coming under increasing pressure, thanks to the Health Insurance Portability and Accountability Act (HIPAA), more and more specialized storage services like those offered by RMS are starting to emerge.

The Detroit, Mich.-based firm also specializes in handling data for Picture Archiving and Communications Systems (PACS), which are fast becoming healthcare IT managers' big storage headache.

"They store files and can deliver X-rays back to peoples' PACS," says Mark Rempe, Iron Mountain's vice president of health information services, adding that RMS's active file management offerings and its strong customer base were also major selling points.

RMS currently has around 122 hospitals on its customer list, which Rempe hopes to add to the 200 hospitals already signed up for Iron Mountain's Comprehensive Health Management (CHM) program. Launched in 2005, CHM is an outsourced service for both physical and electronic files.At this stage, Iron Mountain does not plan to merge RMS and its own CHM offering. "We intend to operate [RMS] as a standalone unit for some period of time," says Rempe."

Although Iron Mountain has refused to disclose the pricetag for RMS, the deal is unlikely to match the $50 million it spent on LiveVault back in 2005, which now forms the basis of the vendor's online backup offerings.

With just $27 million in annual revenues, RMS is generating less cash than LiveVault, which was bringing in around $10 million a quarter at the time it was bought.

"I wouldn't say that it was a small deal -- I would say that it was middle of the road, medium," says Rempe of the RMS acquisition, although he refused to make a direct comparison with LiveVault.

The deal is nonetheless the latest in a string of recent acquisitions by Iron Mountain, including records management vendors Accutrac, ArchivesOne, Italiana Archivi, and German document management vendor Gesellschaft fur beleglose Dokumentenbearbeitung (GbD).A number of other firms are also playing in this space, including information management specialist Recall, and more traditional storage vendors such as IBM, which has recently been ramping up its efforts around PACS and electronic records management.

Iron Mountain's Rempe would not say whether the vendor looked at any other firms prior to acquiring RMS. "It wasn't [a situation] where we were hunting them down," he says. "We had a unique opportunity to acquire this company and decided to do that."

The exec was only slightly more forthcoming on the subject of Iron Mountain's future M&A strategy. "We will continue to be strategic and opportunistic relative to acquisitions, but we're not actively seeking anyone at the moment," he says.

RMS's 400-strong workforce will now join Iron Mountain, along with CEO Ed Santangelo and his management team. Iron Mountain will keep RMS's motor city headquarters open, according to Rempe.

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