Iron Mountain to Buy IO, a Modular Data Center Pioneer, for $1.31B

Iron Mountain has agreed to buy the US operations of IO Data Centers, a colocation provider best known for its pre-manufactured data center modules, for $1.315 billion, the publicly traded real estate investment trust announced Monday.

The deal comes at the end of what has already been a record year for acquisitions in the data center service provider space. The year saw industry-shaping transactions like Digital Realty Trust’s $4.95 billion acquisition of DuPont Fabros Technology, the $1.67 billion acquisition of ViaWest by Peak 10, the $2.15 billion acquisition of the CenturyLink data center portfolio by a group of investors to form a new provider called Cyxtera Technologies, and the acquisition of Vantage Data Centers by Digital Bridge Holdings, reportedly for more than $1 billion.

Iron Mountain, the bulk of whose business has traditionally been document management and storage, has been aggressively expanding its data center services business. The IO deal adds four large data center sites to its portfolio and follows its acquisition of the Denver data center provider Fortrust in July and Credit Suisse data centers in London and Singapore – its first two locations outside of the US – in October.

Its US locations constitute the bulk of IO's operations, but the company also has a data center in Singapore, where Goldman Sachs was the anchor tenant when the facility launched. The banking giant also anchored a London data center by IO, which earlier this year was acquired by Equinix.

Once the Credit Suisse and IO transactions close, Iron Mountain’s total data center capacity will reach more than 90MW. An additional 26MW is under construction, and there is room to add another 135MW in the future, the company said in a statement.

Iron Mountain is buying IO’s owned land and facilities, which include campuses in Phoenix (38MW) and New Jersey (15MW), as well as individual data centers in the Phoenix suburb of Scottsdale (7MW) and in Miamisburg, Ohio (2MW).

IO started as a cross between a colocation and an engineering company, leasing colocation space inside pre-fabricated modular data centers (similar to shipping containers) it designed in-house and installed inside giant warehouses. It also developed its own data center management software, which it used to manage its colocation footprint and sold as a stand-alone software product.

In 2014, the company’s management decided to split it into two independent entities: a colocation provider called IO and a technology firm called Baselayer. IO would continue using the technology as a BaseLayer customer.