Iron Mountain, best known for its shredding and information management services for physical documents, is buying the US data center business of IO Data Centers for $1.3 billion.
IO Data Centers owns four colocation data centers in the US -- two in Arizona, one in New Jersey, and another in Ohio -- that provide access to large power networks for enterprises. It currently has 550 US customers across the financial services, aerospace, federal government and technology sectors.
While its roots are in paper, Boston-based Iron Mountain has made a significant push into the data center space this year. In September, the company bought a 210,000 square-foot data center from Denver-based Fortrust, and it's in the process of buying two Credit Suisse data centers in the London and Singapore markets.
Iron Mountain CEO William Meaney said the company expects its data center business to make up roughly 10 percent of Adjusted EBITDA by 2020.
"We continue to experience strong demand and growth in our data center business, with a focus on establishing a presence in the largest global markets for colocation and enterprise customers," Meaney said.
Mark Kidd, SVP and GM of Iron Mountain's data center business, added, "Importantly, this transaction also enhances our ability to support the needs of the largest cloud providers through new development with expansion capacity in Phoenix as well as New Jersey, another attractive market due to its proximity to the New York metro area."
The transaction is expected to close next month and could include up to $60 million in additional payments, the company said.
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