Iron Mountain Inc. 'BB-' Rating Affirmed On IO Data Center Acquisition; Outlook Remains Stable; New Debt Rated

U.S.-based Iron Mountain Inc. is planning to acquire IO Data Centers, a data center company with assets in Phoenix, Scottsdale, New Jersey, and Ohio, for $1.315 billion, not including up to $60 million in potential earn-outs. Iron Mountain plans to fund the acquisition by issuing $540 million of common equity and $825 million senior unsecured notes. Iron Mountain's acquisition purchase price reflects almost a 19x EBITDA multiple, based on estimated 2017 EBITDA. We expect the company's leverage pro forma for the acquisition will increase to almost 6x for year-end 2017, which we believe is high for the 'BB-' rating. We are affirming our ratings on Iron Mountain, including the 'BB-' corporate credit rating. We are also assigning our 'BB-' issue

...+ U.S.-based Iron Mountain Inc. is planning to acquire IO Data Centers, a data center company with assets in Phoenix, Scottsdale, New Jersey, and Ohio, for $1.315 billion, not including up to $60 million in potential earn-outs. Iron Mountain plans to fund the acquisition by issuing $540 million of common equity and $825 million senior unsecured notes. + Iron Mountain's acquisition purchase price reflects almost a 19x EBITDA multiple, based on estimated 2017 EBITDA. We expect the company's leverage pro forma for the acquisition will increase to almost 6x for year-end 2017, which we believe is high for the '##-' rating. + We are affirming our ratings on Iron Mountain, including the '##-' corporate credit rating. We are also assigning our '##-' issue level and '3' recovery ratings to the company's proposed senior unsecured notes. + The stable rating outlook reflects our expectation that Iron Mountain leverage will decline to 5.5x by year-end 2018 and to the low-5x area in subsequent years....

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