Wednesday, February 24, 2010

Iron Mountain Buys Mimosa for $112 Million

We've been touting the potential of e-discovery in the Document Imaging Report for at least the last year. Well, Iron Mountain's acquisition of Mimosa would seem to validate some of our hype. After all, it paid $112 million for a company with 2009 revenue of $20.6 million and expenses of more than $30 million. So, Iron Mountain basically paid more than five times revenue for a company losing some serious money.

That said, it does give the $3 billion paper giant another stake in the digital world. Mimosa is best known for its e-mail archiving business, although it apparently offers some e-discovery tools as well - a natural extension in our opinion. While Iron Mountain has had technology in both these areas - it has primarily been of a hosted variety. Apparently, Iron Mountain felt it needed Mimosa's on-premise technology to complement its hosted options. 

Iron Mountain's biggest asset, of course, is it's install base. Recently, it has been focusing more and more on converting these paper customers to digital customers - with imaging part of the mix. Iron Mountain is an interesting company with a lot of advantages because of its size and market penetration. It will be interesting to see if it can make this large investment in electronic information technology pay off. We definitely think it has chosen a pertinent and valuable asset to acquire. Now, it will come down to execution.

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