Iron Mountain Incorporated IRM recently added eight facilities in its portfolio through the acquisition of Lane Archive Technologies Limited in Philippines. The facilities located in Manila, Davao and Cebu will strengthen the company’s existing portfolio in the country, and enable it to provide records and data management and destruction services to around 1,000 customers.
Notably, Lane Archive Technologies, based in Manila, offers records and document management services and data destruction, to a wide range of customers throughout Philippines.
Per management, the buyout adds scale and expands Iron Mountain’s local and regional business that is already well established in the country’s major business and commercial centers. Further, with fortified presence and enhanced services, the acquisition serves information management needs of the company’s international customers, with operations in Philippines.
Moreover, expansion in Philippines is a strategic fit as the country is witnessing a shift toward digital transformation, along with growth in records and information management outsourcing. Hence, leveraging on this trend, Iron Mountain is on the lookout for buyout opportunities that will compliment the company’s expertise in the region. Also, this will enable the company to integrate its local and global customers in the regional business, thereby improving returns.
While the real estate investment trust (REIT) has a strong portfolio in North America and Western Europe, the company is now focusing on expansion in emerging markets to drive its long-term performance.
However, Iron Mountain has a highly-leveraged balance sheet. High debt may limit the company’s future expansion and worsen its risk profile. The rising interest rate scenario is also expected to negatively impact its profitability, moving ahead.
In the past six months, shares of this Zacks Rank #3 (Hold) company have underperformed the industry it belongs to. The stock has declined 8.9% compared with the industry’s loss of 7.5%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nonetheless, with growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data-center REITs are expected to experience a boom market. This, along with an improved outlook for economic growth, is anticipated to spur demand for data centers, and offer ample scope for growth to data-center REITs, including Digital Realty DLR, CoreSite Realty Corporation COR and Equinix Inc. EQIX.
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