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Iron Mountain moved further into the backup and recovery space Tuesday with the acquisition of Connected Corp. for $117 million.
Connected backs up desktop data for more than 600 corporations, with more than 2 million licenses worldwide, and the company has also begun to offer server and email backup products.
For Iron Mountain, which boasts 200,000 customers and a digital archive that is growing at a rate of one terabyte every 36 hours, the acquisition formalizes a two-year-old partnership with Connected and helps the company better compete with offerings from the likes of Veritas and Computer Associates. The acquisition also broadens Iron Mountain's offerings for small and medium businesses (SMBs).
"It's been in the making for a long time," said Peter Delle Donne, Iron Mountain's president of Enterprise Solutions and Services. "We felt it was timely to do this acquisition."
"We had great alignment from day one," said Connected COO John Clancy.
Regulatory compliance, information life cycle management (ILM) and business continuity and disaster recovery have been among the fastest-growing storage services. Clancy said Connected has been growing at a 50% rate, with $18 million in revenues the last two quarters, while Donne said Iron Mountain's digital services have doubled to $20 million in revenue this year.
"What a smart move," said Steve Duplessie, founder and senior analyst at Enterprise Strategy Group. "Connected, with its millions of user licenses, married to the king of all records management players, is a boon for both companies. It opens up an explosive new market opportunity for Iron Mountain and lets Connected walk into doors that it never would have been able to open as a standalone player. Iron Mountain continues to be one consistently impressive deal-maker."
Iron Mountain CEO Richard Reese said the all-cash acquisition furthers the company's goal of "helping customers manage and protect all of their information, both physical and digital, regardless of format or location. This is a logical move for Iron Mountain because it extends our protection to distributed data, which is a particularly difficult management challenge and area of vulnerability for our customers. Our new combination of offerings ensures better information protection, access, availability and compliance."
As much as 60 percent of corporate information resides on laptops, desktops and other edge-of-the-network devices, the companies said, so businesses need solutions to back up, archive and recover this distributed data.
The addition of Connected's software products offers Iron Mountain customers in-source online data backup and archiving solutions in addition to outsourced services. Connected's products include its DataProtector desktop, laptop and server data protection solutions, and ArchiveStore/EM software for email archiving.
The deal has received board and shareholder approvals and is subject only to regulatory review and closing conditions. Iron Mountain expects to complete the transaction in the fourth quarter.