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The transaction is done on an 80-20 equity stake share basis, with the second tranche worth $200 million expected to close within three years.
Founder and Editor, The Tech Capital
December 13, 2021 | 1:00 AM GMT
Under the terms of the agreement, Iron Mountain will acquire at closing 80 percent of the shares of ITRenew for approximately $725 million in cash.
The remaining 20 percent will be acquired in cash within three years from close, with a minimum payment of $200 million and the final amount subject to the performance of the business.
The transaction implies a minimum enterprise value of $925 million, which corresponds to a purchase multiple of approximately 12x based on trailing twelve month EBITDA as of September 30, 2021.
Previous investor ZMC, a private equity firm focused on technology, media and communications investments, will exit its position as part of this transaction.
The transaction is expected to close in the first quarter of 2022, subject to regulatory approval and other customary closing conditions.
William Meaney, Chief Executive Officer of Iron Mountain, said: “This strategic transaction marks an important step in advancing Iron Mountain’s position in Asset Lifecycle Management and accelerating our enterprise growth trajectory.
“ITRenew complements our fast-growing IT Asset Lifecycle Management and Data Center businesses bringing capabilities to serve some of the largest and most innovative companies in the world.”
Founded in 2000, ITRenew principally serves hyperscalers, the fastest-growing segment of the global IT Asset Disposition market, focusing on maximising the lifetime value of data centre servers through sustainable asset disposition, recycling and remarketing solutions.
As of September 30, 2021, ITRenew had trailing twelve-month revenue in excess of $415 million, and has a two year compounded annual growth rate of approximately 16 percent.
Following the close of the transaction, 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 ultimate decommissioning and disposition of technology assets at the end of their useful life.
Iron Mountain estimates the IT Asset Disposition total addressable market is $30 billion and growing 11 percent compounded annually over the next five years.
Aidin Aghamiri, Chief Executive Officer of ITRenew, said: “We are excited to enter this agreement with Iron Mountain, as the combination will provide us with the scale and global footprint to achieve our vision and deliver long-term growth.”
Morgan Stanley & Co. LLC, is serving as financial advisor, and Weil, Gotshal & Manges LLP is serving as legal counsel to Iron Mountain.
Jefferies LLC is serving as financial advisor, and Sidley Austin LLP is serving as legal counsel to ITRenew.
Reach João Marques Lima at email@example.com
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