Iron Mountain, Inc.

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Iron Mountain, Inc.

745 Atlantic Avenue
Boston, Massachusetts 02111
U.S.A.
Telephone: (617) 535-4766
Toll Free: (800) 883-8000
Fax: (617) 350-7881
Web site: http://www.ironmountain.com

Public Company
Incorporated: 1951
Employees: 8,600
Sales: $519.5 million (1999)
Stock Exchanges: New York
Ticker Symbol: IMTN
NAIC: 49311 4225 General Warehousing and Storage

Iron Mountain, Inc., is the largest records and information management company in the world. The company provides a full range of records storage and management services to the business sector, health care industry, law profession, and management consulting industry throughout the United States and the United Kingdom. The company can assist its customers with the storage of computer disks and tapes, microfilm and microfiche, audio and video tapes, x-rays and blueprints, film and optical disks and, of course, paper. The trend toward outsourcing records and information management has catapulted Iron Mountain to the top. In 1994, 1995, and 1996, company revenues increased at growth rates of 19, 33, and 50 percent respectively, and in 1998 the company reported that revenues increased a whopping 103 percent over the previous year. At the same time, Iron Mountain executed a comprehensive acquisitions strategy that led to the purchase of 15 firms noted for their strength and potential in records and information management. With the purchase of British Data Management, Ltd. in the same year, Iron Mountain took the worldwide leadership position in the industry, a position it cemented with the 1999 acquisition of competitor Pierce Leahy Corporation.

Early History

Iron Mountain was established in 1951 by a group of dedicated visionaries who understood the nature of the modern business era. Through the end of World War II, records for all types of business activities were recorded by hand. If the company was organized and prosperous enough, the records were later typed and then filed in a filing cabinet or appropriate container, often a heavy-duty cardboard box. As time passed, older records were then stored in a basement or warehouse, whichever was most convenient and least damp.

The entrepreneurs who decided to open a records management firm understood the old-fashioned methods and knew that these methods would not be able to keep pace with the burgeoning economy and the rise of the consumer product era in postwar America. How could a company that sold millions and millions of items keep records of all the transactions and inventory by hand? How could a firm with thousands of employees ensure that they received their paychecks in the exact amount at the right time? How could hospitals maintain patient information for rapid retrieval and analysis? As businesses expanded, how could management be sure that their ventures met with the regulatory standards set by state and federal government agencies?

As laborious and time-consuming in-house record keeping began to drain valuable resources away from the primary focus of a company, managers began to search for new ways to store and manage their records while retaining easy access to critical information. At first, Iron Mountain was contracted by large businesses within and around the Boston metropolitan area to provide consulting services for records management. Soon, however, the consulting services turned into an operational activity when Iron Mountain started its business records storage and management system. Iron Mountain assisted a company in gathering and organizing records; establishing a file system by date, product, or topic; and then providing a cost-effective method to manage the entire system that had been established. By the end of the 1950s, Iron Mountain had gained a reputation for providing reliable, efficient, highly organized, cost-effective solutions to the problems faced by both small and large companies in managing their records.

Throughout the 1960s, management at Iron Mountain focused on providing high-quality consulting services, as well as assisting firms in the storage and management of business records. During this time, the company began to expand the range of its services. Active file management became one of the services that was most sought after, especially by larger firms, and Iron Mountain came up with the innovative idea to use customized retrieval labels so that any record could be routed from a manager’s or supervisor’s desk in the administrative office to the receiving dock with minimal effort and maximum efficiency. As management in larger firms began to realize the importance of controlling critical information and having access to it at a moment’s notice, Iron Mountain began to develop new and even more efficient methods to meet customer needs, including such techniques as sealing files to protect their contents and a new way to re-file records quickly and accurately.

Expansion: 1970s-80s

During the 1970s and 1980s Iron Mountain expanded its operations across the United States and into Europe. Having already established the nation’s first underground center for records storage in 1951, the year the company was founded, Iron Mountain was now inundated with requests from Fortune 500 firms to assist them in their management and storage of an ever-increasing number of records. To meet this demand, the company embarked upon a comprehensive strategy to expand across the United States. While maintaining its headquarters in Boston, the company opened offices in New York City and throughout the state of New York, as well as in Ohio, California, Indiana, Florida, Pennsylvania, Delaware, Arizona, New Jersey, New Hampshire, Kentucky, Texas, Connecticut, Virginia, North Carolina, Rhode Island, and Nebraska. And this was only the first round of the company’s expansion program. Additional offices followed in New Mexico, Michigan, Georgia, Maryland, Alabama, Louisiana, Colorado, Missouri, Nevada, Oregon, Minnesota, Maine, Utah, and Washington. By the end of the 1980s, Iron Mountain provided a wide variety of records storage and management services to nearly one-third of the companies on the Fortune 500 list, as well as to a host of start-ups, small firms, and mid-sized companies.

During the 1980s Iron Mountain expanded its services dramatically in the field of medicine, becoming the nation’s leading provider of records storage to a wide spectrum of doctors, hospitals, and insurance companies within the health care industry. The specialized services that the company provided involved open-shelf filing, on-site indexing projects, on-site purges, stat and regular schedule deliveries of patient records, and radiology file management. Iron Mountain worked with some of the country’s busiest hospitals and largest research laboratories, as well as small clinics and group practices, to provide safe record storage and management. Perhaps the most innovative and useful of all the services provided by the company included the stat delivery of patient records. Iron Mountain operated and maintained its own storage facilities for hospitals that were able to deliver hundreds of medical files throughout the day and night at a moment’s notice in the case of a life or death matter.

It was also during the 1980s that the company grew into the leading provider of records storage services for the legal profession. Although Iron Mountain had been providing such services to lawyers from its inception, during the 1980s the company developed customized searching, sorting, and selection criteria that enabled law professionals to either broaden or narrow the scope and range of their search for legal records and documents. Iron Mountain also developed a filing system for lawyers based on customer needs, including access to files by attorney, date, client, issue, or any other field that was requested. This aspect of the company’s services grew rapidly throughout the decade, and most of the firm’s offices around the United States were provided some sort of legal file storage and management. As the 1980s drew to a close, Iron Mountain was providing state-of-the art legal file storage and management services to some of the most prestigious law firms in the United States.

The 1990s and Beyond

By the early 1990s, Iron Mountain offered a full range of services, including business records storage and management, software escrow, healthcare records storage and management, active file management, vital records protection, data security services, records management consulting, facilities management, film and sound archive services, destruction services, disaster recovery support, and storage cartons and supplies. By the mid-1990s, Iron Mountain was clearly the dominant company within the industry, and continuing to grow at a record pace. The firm had 30 million square feet of storage space, and was providing its services to over 25,000 customers, including an ever-increasing number of Fortune 500 firms.

Company Perspectives:

Iron Mountain is proud of its dramatic growth of the past several years—growth that has further reinforced the Company’s position as the recognized leader in the records management industry. Iron Mountain builds upon enduring customer relationships in records management while offering a range of related services and products. The Company aggressively invests in technology to improve customer access and information flows. And the Company sees continuing growth opportunities in the U.S. market along with largely untapped opportunities in the global marketplace. Against the backdrop of this growth, the business fundamentals remain constant. That is why the same themes reappear in Iron Mountain’s annual report each year—themes of Growth, Stability, Leadership, and Technology. These central themes have sustained the Company’s success over the past three decades. Continued execution along these themes will determine Iron Mountain’s success for the foreseeable future.

Ambitious as ever, and ready to take an even larger share of the market, management at the company decided to implement one of the most aggressive growth through acquisitions strategies in modern corporate history. During four years beginning in 1994, Iron Mountain acquired no less than 62 companies, enabling the firm to establish a new presence in 46 markets. In 1998 alone the company made 12 purchases, some of the more notable including the Arcus Group, Inc., which expanded Iron Mountain’s data security service business and propelled it to number one within the industry; National Underground Storage, located in Pennsylvania, which significantly enhanced and strengthened the company’s vital records and film and sound archive storage services; and a number of companies in the Pacific Northwest, which resulted in Iron Mountain becoming the leader in the region. All of these acquisitions were reorganized and incorporated into Iron Mountain’s administrative and regional operations. In addition, Iron Mountain made a foray into Europe, acquiring British Data Management, Ltd., one of the two leaders in providing records storage and management services throughout the United Kingdom. Although Europe remained behind the United States in outsourcing records storage and management services, Iron Mountain’s management saw the market as having great potential for the future and viewed the acquisition of British Data Management as a step toward further expansion on the continent, including France, Germany, and the Netherlands.

By the end of fiscal 1998, Iron Mountain could justifiably lay claim to the title of “The World’s Largest Records Management Company.” The company counted offices in nearly 70 cities across the United States, with additional offices planned due to the continuing acquisitions program. Most impressively, the company reported a 103 percent increase in revenues from 1997 to the end of 1998. Revenues for 1998 reached $423 million.

However, Iron Mountain did not stop there. In October 1999, the company announced a deal to merge with its chief rival, Pierce Leahy Corporation in a stock swap valued at around $1.1 billion. This “reverse merger” was completed in February 2000, with Pierce Leahy assuming the Iron Mountain name. Together, the two powerhouses boasted over 115,000 clients through their 77 facilities in the United States, nine Canadian operations, and joint ventures in Mexico, South America, and Europe. The new Iron Mountain assumed its former rival’s debt of about $570 million as well as the costs incurred in the transaction, while Pierce Leahy shareholders acquired about 35 percent of the new entity’s stock. Prospects for the year 2000 looked just as bright. Early in the year, the company announced yet another acquisition, that of Data Storage Centers, Inc., of Jacksonville, Florida, which would give the company a greater presence in the southeastern states, particularly Florida. With the global business sector generating ever-greater amounts of data and information, whether paper or electronic, the demand for Iron Mountain’s services can only grow.

Principal Subsidiaries

Comac Inc.; Arcus Data Security Inc.; British Data Management, Ltd.(U.K.)

Principal Competitors

Lason, Inc.; Administaff, Inc.

Key Dates:

1951:: Iron Mountain opens for business in Boston.
1955:: Company expands legal profession records storage and management services.
1960:: Active file management services are expanded.
1970:: Underground records storage facilities are enhanced.
1994:: Major growth through acquisitions strategy begins.
1998:: Company makes first oversees acquisition, British Data Management, Ltd., and reports revenues of $423 million at the end of the fiscal year.
1999:: Iron Mountain acquires its top competitor Pierce Leahy.