Iron Mountain Buys Mimosa Systems for $112 Million

(Reuters) – Information management company Iron Mountain Inc (IRM.N) said it acquired Mimosa Systems Inc, a Santa Clara, California-based provider of on-site digital storage services, for $112 million in cash.

 

With the acquisition, Iron Mountain will now get access to Mimosa’s key customers like United Healthcare Group (UNH.N) and Flextronics (FLEX.O).

 

The acquisition is expected to “modestly” hurt earnings in its first year, with expected synergies and revenue growth driving significant increases in profits beyond 2010, the company said.

 

“By combining Mimosa’s on-premises archive with our cloud-based technologies, Iron Mountain can now store, recover and discover digital content wherever it resides,” Iron Mountain Digital president Ramana Venkata said in a statement.

 

Iron Mountain provides records management, data protection and recovery, and paper shredding services. Until now, Iron Mountain Digital, the technology arm of Iron Mountain, provided cloud-based services to customers.

 

Boston-based Iron Mountain entered the digital storage segment in 2001 and has made four acquisitions since then.

 

Iron Mountain’s last acquisition in the digital segment was of e-discovery firm Stratify for $158 million, its biggest deal in the space.

 

The company has spent about $800 million on acquisitions in the last five years.

 

“With Mimosa in the fold, what we’re going after is an approximately $10.5 billion market around the things we’re doing today,” Venkata said.

 

Iron Mountain’s rivals include EMC (EMC.N) and Symantec (SYMC.O).

 

Shares of the company closed at $24.15 Friday on the New York Stock Exchange. (Reporting by Mansi Dutta; Editing by Gopakumar Warrier)

peHUB Note: Mimosa Systems Inc. had raised over $50 million in VC funding, from August Capital, Clearstone Venture Partners, Focus Ventures JAFCO Ventures and Mayfield Fund.