Iron Mountain, U.S. Reach Accord Easing Way for Recall Dealby
Justice Department announces filing of lawsuit and settlement
Companies to divest assets in 15 markets to gain approval
Iron Mountain Inc. won Justice Department approval of its planned $2.6 billion acquisition of Recall Holdings Ltd. on the condition that the companies sell some of their storage and information management assets in 15 U.S. markets.
The accord is part of an antitrust lawsuit and proposed settlement filed in Washington federal court, the Justice Department said in a statement Thursday. The transaction was reviewed and approved by competition regulators in Australia and Iron Mountain said U.K. regulators also signed off. The deal is still subject to review by Canadian regulators, according to the U.S.
“Iron Mountain’s proposed acquisition of Recall would have harmed records management customers in 15 metropolitan areas by dramatically reducing competition in these markets,” Assistant Attorney General Bill Baer said in the statement. “As a result of today’s settlement, these customers will continue to enjoy the fruits of competition – lower prices and higher-quality services.”
Boston-based Iron Mountain is the biggest American document storage and data management business. It and Norcross, Georgia-based Recall will give up records management operations in U.S. cities where they’re already two of the three biggest providers of those services, the Justice Department said. The records-management facilities being sold are currently owned by Recall.
Among those cities are San Diego, Seattle, Pittsburgh, Detroit and Kansas City, Missouri, as well as Charlotte, Raleigh and Durham in North Carolina. The companies’ Justice Department pact is subject to U.S. court approval.
Iron Mountain said in a statement that it expects to continue to providing services to customers of both companies in each market and country now served by either of them.
Amanda Fountain, a spokeswoman for Recall, said she couldn’t immediately comment on the agreement.
Iron Mountain also agreed to sell its Australian business, with the exception of local records management customers in the Northern Territory and its data protection business, according to the Australian Competition and Consumer Commission.
Iron Mountain estimates it will receive about $220 million in proceeds from the divestitures. It said it anticipates that for every $25 million change in proceeds, Adjusted EPS accretion will shift approximately 0.3 percent in the same direction. Iron Mountain said it expects to use the net proceeds to repay its long-term debt or its revolving credit facility, or both.
The case is U.S. v. Iron Mountain Inc., 16-cv-00595, U.S. District Court, District of Columbia (Washington).