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Following a major acquisition and facing a management shakeup, Iron Mountain’s IT arm is posting growing earnings. | Bandernach/Shutterstock
Data management giant Iron Mountain reported a $213 million increase in revenue last year thanks to its acquisition of ITRenew.
This is one of Iron Mountain’s publicly traded companies, according to recent financial filings with IATA.
Iron Mountain paid $718 million on January 25, 2022. to buy 80% interest in ITRenew, a US-based company It provides services to senior level and enterprise IT infrastructure managers. Iron Mountain has the option to buy the remaining 20% of the company after January 2025.
Today, Iron Mountain’s Asset Lifecycle Management (ALM) business is made up of ITRenew, but it also includes some of Iron Mountain’s legacy ITAD operations.
New details about the transaction and the impact of the acquisition are included in Iron Mountains. 2022 financial statement. Iron Mountain previously reported financials for its North American records and information management (RIM) business, which was much larger than its ITAD business, making the performance of the ITAD business particularly difficult to measure.
Now, Iron Mountain includes results from its ALM business under the “Corporate and Other” segment, which also includes a smaller art management business and corporate-wide executive and personnel expenses. In the year In 2022, “enterprise and other” services revenue was $352 million, up 244% on a constant currency basis from 2021. Of this increase, 215 percentage points came from acquisitions, particularly ITRenew, and 29 percentage points from organic growth from ITAD operations.
The following are other interesting notes regarding Iron Mountain’s ALM business.
Administrative changes: In February, the A.L.M. Business Manager Dare Evens has announced her retirement in mid-September 2023. She will be replaced by Mark Kidd, who is currently the Business Manager of the Iron Mountain Data Center. In his new role, Kidd will oversee both the ALM and data center businesses. It has been the company’s long-term goal to have the two separate businesses run by one manager, the announcement said.
“The acquisition of ALM assets was determined based on the overlapping customer base and needs between the company’s data center and ALM businesses.” Advertising states.
Competitive advantage of cross-selling: as if February 23 conference call with investorsCEO William Meany exemplified how Iron Mountain can win over ITAD customers by offering other services at the same time. In the year In 2022, a large not-for-profit health care provider, a 20-year records management customer of Iron Mountain, expanded its billing services for Iron Mountain to include ITAD, data management, secure records and document digitization services. Under the new 10-year deal, that health care provider is paying Iron Mountain $5 million a year, up from $2.5 million a year under the previous contract.
During the call, Manny also noted that Iron Mountain renewed its contract with its largest ALM client, one of the largest technology companies in the world.
“We continue to enjoy and drive growth in the overall market in the asset lifecycle management category,” he said.
Influences from China: Looking forward, the company is projecting conservative revenue growth for its ALM business unit, which focuses on decommissioning high-volume data centers, Iron Mountain CFO Barry Haytin said on the call. This is due to the continued impact of Covid-19 in China.
“Remember, the release market in 2010 It performed better in the first half of 2022 and declined sharply following severe lockdowns in China,” Haitian said.
According to the company’s annual report, A.L.M. Most of the decommissioned assets that the company resells are sold to Myland China, which poses the risk of trade disruptions or reduced demand in China.
“I think we’re cautious in our expectations for ITRnew because, as you’ve seen in the press, China continues – the restrictions are gone, they have a lot of challenges there with COVID,” Hytinen said. “So we don’t see the market developing meaningfully, but we are cautiously optimistic. Therefore, we are planning for the first quarter to allow our ALM business to match fourth quarter revenue levels and then continue to increase throughout the year.
A competitor in the data center outsourcing market, SIMS Lifecycle Services; reported Last year, the soft used equipment market in China. Sims said in a statement that demand and average prices for used electronics sold in China are low.
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