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Iron Mountain (IRM) Takes Over GRM’s Operations in China

Zacks

Iron Mountain Incorporated IRM recently announced the buyout of GRM's Chinese operations. The move comes as part of this storage and information management service firm’s efforts to expand its footprint in the faster growing Asian markets like China.

Particularly, the GRM China acquisition has enabled the company to grow its presence in Beijing, Shanghai, Guangdong, Qingdao, Dalian, Chengdu and Wuhan (including more than 2.5 million cubic feet of storage). It brings on board 170 employees to its Chinese operations and enhances the customer base with a tally of 550.

A division of GRM Document Management, GRM China was the foremost licensed provider of Records and Information Management services in the Peoples Republic of China, and had opened its first branch in Shanghai in 2003. The company delivers a host of services, including document storage, media storage, document imaging, secure destruction and information management consulting services to large multinationals as well as local companies.

The latest acquisition is a strategic fit for Iron Mountain as there is a rising scope for records and information-management outsourcing in the region and with the buyout adding a significant operational and storage capacity, the company is capable of banking on such favorable trends.

Moreover, Iron Mountain has been making efforts to improve its core business by offering additional services. In September, it added data-center colocation and network services to its offering in the company's Schedule 36 vehicle contract with the General Services Administration (GSA), under Special Item Number 51-600 for Electronic Records Management Solutions. The move indicates the company’s focus to continuously grow its Federal business. (Read more: Iron Mountain Adds Data-Center Services to GSA Schedule 36)

The company’s strategic acquisitions, along with its diversified revenue base and strong product portfolio, will likely drive Iron Mountain’s top-line growth. Further, transformation initiatives, including expansion of data-center business, and continued strong performance of the storage rental business, look encouraging. However, the costs of such efforts weigh on its financials, especially as the company already has a highly leveraged balance sheet. Also, Iron Mountain’s services business revenues remain modest. These may affect results in the near term.

Shares of this Zacks Rank #3 (Hold) company have underperformed its industry over the past six months. Its shares have gained 1.4%, while the industry has recorded growth of 6.8% during this time frame.



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