BOSTON (AP) -- Iron Mountain Inc. announced Tuesday that its board has approved plans to convert the company into a real estate investment trust to boost returns for shareholders and create for opportunities for Iron Mountain.
The Boston-based information storage company said the decision to change its structure comes after careful consideration of various ways to maximize the company's value. If it is successful in its conversion, it would become a real estate investment trust no sooner than 2014.
Real estate investment trusts receive special tax consideration. Their securities sell like stock on major exchanges.
Iron Mountain said the structure would increase stockholder payouts and would have virtually no impact on customers. The company said it gets the largest portion of its income from renting out storage space in its real estate holdings around the globe.
Iron Mountain expects to distribute $1 billion to $1.5 billion in accumulated earnings and profits to stockholders if it converts, as federal regulations require. That payout must be at least 20 percent cash and up to 80 percent common stock in Iron Mountain. The company expects to distribute a significant portion of this in the fourth quarter of 2012 and the balance over several years. The company expects to incur $325 million to $425 million in one-time costs from the conversion.
Separately, Iron Mountain said Tuesday that it is increasing its quarterly dividend by 8 percent. The next dividend of 27 cents per share will be paid July 13 to shareholders of record as of June 22. Its most recent dividend payment was 25 cents per share.
Shares of Iron Mountain jumped $4.39, or 15.5 percent, to $32.79 after hours on the news. They had ended regular trading up 99 cents, or 3.6 percent, at $28.40.