US data storage firm Iron Mountain to buy rival Recall Holdings for $2.2 bn

Leading US data storage and information management provider Iron Mountain Inc has agreed to acquire Australia-listed rival Recall Holdings Ltd in a cash-and-stock deal valued at approximately A$2.7 billion ($2.2 billion).

The combination is expected to create a leading global information management solutions company with unmatched operational and geographic reach.

Iron Mountain has offered Recall shareholders an option to receive either 0.1722 Iron Mountain shares or A$8.50 cash per share they own. Based on the cash part, it represents a 33-per cent premium to the closing price of Recall shares of A$6.40 on 12 December prior to the announcement of Iron Mountain's initial proposal.

Under the terms, the total cash consideration cannot exceed A$225 million, Iron Mountain said.

Iron Mountain's latest offer is about 21-per cent higher than its December bid of A$7 per share of Recall, which Recall rejected saying that the price was too low.

Atlanta-headquartered Recall, established in 1999 by Sydney-based logistics group Brambles Ltd, is a leading provider of information management and protection services to around 80,000 customers in diverse sectors in 24 countries. The company has corporate offices in Brazil, the UK, Malaysia, and Australia and has over 300 operations centers across the globe.

Recall was demerged from associated logistics services provider Brambles in 2013.

Recall has a market cap of about A$2.4 billion. The stock has risen over 70 per cent in the past one year to close at A$7.62 yesterday on the Australian Securities Exchange (ASX).

Iron Mountain chief executive officer William Meaney said: ''Our proposed transaction with Recall represents a compelling value proposition that we expect will generate significant synergies and be highly accretive after year one for both companies' shareholders.''

Recall chairman Ian Blackburne commented: "The combination of our two businesses makes strong commercial sense and the transaction terms represent attractive value for Recall shareholders.''

Boston-based Iron Mountain provides records management, information destruction and data backup and recovery services to over 156,000 customers across North America, Europe, Latin America, and Asia.

The company has over 1,000 facilities in 36 countries. 

Iron Mountain shares were up 2.9 per cent to end at $37.28 yesterday in New York, giving the company a market cap of $7.85 billion

New York-listed Iron Mountain said it would establish a secondary listing on ASX to allow local trading of its shares by Recall investors. Transaction terms won't be adjusted for dividends, the companies said.

Goldman Sachs Group Inc served as financial advisor to Iron Mountain on the deal while Recall was advised by Bank of America Corp and UBS AG.

Separately, Iron Mountain has entered into a partnership yesterday with CloudBlue, an Ingram Micro company and a leading provider of IT asset disposition, data destruction and e-waste recycling services worldwide to provide secure e-waste and IT asset disposition services to its customers.