Once completed, Iron Mountain will acquire an 80% stake in ITRenew for approximately $725 million in cash, with the remaining 20% to be acquired within three years of closing for roughly $200 million, for a total enterprise value of $925 million.
"This strategic transaction marks an important step in advancing Iron Mountain’s position in Asset Lifecycle Management and accelerating our enterprise growth trajectory,” said William Meaney, chief executive officer of Iron Mountain.
“ITRenew complements our fast-growing IT Asset Lifecycle Management and Data Center businesses bringing capabilities to serve some of the largest and most innovative companies in the world.”
Under the terms of the transaction, previous technology, media and communications investor ZMC will exit the company.
Post-transaction, ITRenew will form the platform for Iron Mountain’s Global IT Asset Lifecycle Management business. The combination will enhance the company’s ability to provide end-to-end services to the hyperscale, corporate data centre and corporate end user device segments.
“With ITRenew, we become a key player in addressing the global challenge of reducing the environmental impact of IT and data centre operations, furthering our commitment to ESG,” added Deirdre Evens, vice president of asset lifecycle management at Iron Mountain.
Through the deal Iron Mountain is set to benefit from the sizable opportunity in the large and growing it asset disposition market. As ITRenew largely operates in the hyperscale segment of the market, it is the fastest-growing segment and is forecasted to grow in the high teens compounded annually over the next five years.
ITRenew’s innovative circular economy models help companies achieve critical sustainability benefits, this will bolster Iron Mountain’s Environmental, Social and Governance offerings.
From a financial perspective, Iron Mountain anticipates the acquisition will be immediately accretive to 2022 adjusted funds from operations (AFFO) and positively enhance the Company’s long-term revenue and cash flow growth.
"We are excited to enter this agreement with Iron Mountain, as the combination will provide us with the scale and global footprint to achieve our vision and deliver long-term growth,” said Aidin Aghamiri, chief executive officer of ITRenew.
As of September 30, 2021, ITRenew had trailing twelve-month revenue in excess of $415 million, and has a two-year compounded annual growth rate of approximately 16%. In addition, its $925 million, corresponds to a purchase multiple of approximately 12x.
The deal is expected to close in the first quarter of 2022, subject to regulatory approval and standard closing conditions.
