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Iron Mountain Buys Suppla Unit, Eyes Growth in Latin America

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Iron Mountain Incorporated (IRM - Free Report) has expanded its footprint in Colombia with the acquisition of Suppla's Business Process Outsourcing (BPO) unit. The move comes as part of the company’s move to boost its presence in Latin America, a region that offers substantial scope for the information management business’ growth.

Notably, Suppla’s Business Process Outsourcing solutions comprise records management and data-governance offerings for regulated industries. The industries that are served include healthcare and social services, financial services, government, education, communications and information technology sectors.

The buyout, in particular, enhances the company’s presence to eight facilities in thriving markets of Bogota, Medellin, Cali and Barranquilla. Iron Mountain will now manage an additional 90 customers with an inventory of 1.7 million cubic feet.

The expanded footprint, staff and strong customer relationships will enable Iron Mountain to expand its scale, and better cater to its existing and future customers with information and record-management needs.

Notably, Iron Mountain’s inorganic growth strategy to emerge as a preeminent global leader in storage and information management services will bolster its top line. Further, the company remains on track to achieve its Vision 2020. Iron Mountain targets its growth portfolio, comprising emerging markets, data-center and adjacent businesses, to contribute 30% to total revenues in 2020.

In tune with such efforts, recently, Iron Mountain announced the opening of a second enterprise-class data-center facility, AZP-2, in a bid to expand its Phoenix data-center campus. The initial phase offers four megawatts of simultaneously-maintainable power capacity. Backed by scalable and flexible design, the facility is capable of catering to both multi-tenant enterprise retail colocation, as well as hyper-scale needs.

Nonetheless, the competitive landscape of the storage and information management services industry is anticipated to result in aggressive pricing, dampening Iron Mountain’s margins in the near term.

Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 6.1% compared with the industry’s growth of 6%.



Stocks to Consider

Investors can also consider some better-ranked stocks from the same space like Alexandria Real Estate Equities, Inc. (ARE - Free Report) , Equity Residential (EQR - Free Report) and Mid-America Apartment Communities, Inc. (MAA - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alexandria Real Estate’s Zacks Consensus Estimate for 2019 funds from operations (FFO) per share has moved marginally north to $6.98 in the past three months.

Equity Residential’s FFO per share estimate for the current year moved up 1.5% to $3.45 over the past month.

Mid-America’s Zacks Consensus Estimate for the ongoing year’s FFO per share climbed marginally to $6.28 in a month’s time.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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