Iron Mountain has entered into a definitive agreement to acquire ITRenew, a global provider of critical data center lifecycle management solutions.
Upon closing, Iron Mountain will acquire 80 percent of the outstanding shares of ITRenew in cash and debt-free for approximately $ 725 million in cash, with the remaining 20 percent vesting within three years of closing for a value of minimum business of $ 925 million. . Former investor ZMC, a leading private equity firm focused on investments in technology, media and communications, will step down as part of the transaction.
Founded in 2000, ITRenew primarily serves hyperscalers, the fastest growing segment of the global IT asset disposal market, with a focus on maximizing the lifetime value of data center servers through sustainable solutions. disposal, recycling and remarketing of assets.
With its comprehensive portfolio of data retirement and security services, ITRenew enables organizations to securely protect their data, maximize the value of their hardware assets, and positively impact the environment through circularity of IT assets. As of September 30, 2021, ITRenew had year-over-year revenue of over $ 415 million and a two-year compound annual growth rate of approximately 16%.
After the transaction closes, ITRenew will form the platform for Iron Mountain’s Global IT Asset Lifecycle Management business. IT asset lifecycle management refers to the deployment, management, and final decommissioning and disposition of technology assets at the end of their useful life. The combination dramatically improves the company’s ability to deliver end-to-end services to hyperscale segments, enterprise data centers and enterprise end-user devices.
Policy rationale and benefits
Significant opportunity for Iron Mountain to capitalize on the large and growing IT asset disposal market: Management estimates that the total addressable market for IT asset disposal is $ 30 billion and grows 11% each year over the next five years. ITRenew operates primarily in the hyperscale segment of the market, which is the fastest growing segment and expected to grow in the coming years, compounded annually over the next five years.
Leverages and expands key strengths of Iron Mountain: Iron Mountain will build on this strategic platform and accelerate the company’s growth by leveraging its global customer base and its data security and logistics capabilities. Additionally, ITRenew’s hyperscale focus is highly complementary to Iron Mountain’s existing data center business.
Advances Iron Mountain’s global sustainability strategy: ITRenew’s innovative circular economy models help businesses achieve key sustainability benefits. Today, Iron Mountain’s data centers are powered 100% by renewable energy, and with ITRenew, the company sees significant opportunities to improve the value of its environmental, social and governance offerings.
Financially interesting: Iron Mountain expects the acquisition to be immediately accretive to the 2022 AFFOs and positively enhance the Company’s long-term revenue and cash flow growth. The Company has secured financing commitments and plans to finance the transaction through a combination of new debt and borrowing capacity under its current revolver with modest impact on short-term leverage. The company plans to deleverage quickly and move 2022 out of its target leverage range.
“This strategic transaction marks an important step in advancing Iron Mountain’s position in asset lifecycle management and accelerating our company’s growth trajectory,” said William Meaney, President and CEO of Iron Mountain . “ITRenew complements our rapidly growing IT asset and data center lifecycle management business by providing capabilities to serve some of the world’s largest and most innovative businesses. “
Deirdre Evens, Iron Mountain Executive Vice President, Asset Lifecycle Management, added, “With ITRenew, we are becoming a key player in meeting the global challenge of reducing the environmental impact of IT operations and data centers. data, reinforcing our commitment to ESG. “
“We are delighted to enter into this agreement with Iron Mountain as the combination will provide us with the scale and global footprint necessary to realize our vision and ensure long-term growth,” said Aidin Aghamiri, CEO of ITRenew.