US records manager Iron Mountain seeks buyer for NZ unit

US records manager Iron Mountain seeks buyer for NZ unit

By Paul McBeth

July 29 (BusinessDesk) – Iron Mountain Inc., the NYSE-listed information management company, wants to sell its New Zealand unit after reviewing its international businesses.

The Boston-based company has concluded it is better off without a New Zealand base, it said in a filing to the Securities and Exchange Commission. That comes a month after settling the US$380 million sale of its online back-up and digital archiving unit to British software firm Autonomy Corp.

“We think that our New Zealand business folded into somebody else probably has more value to them than it does to us,” chairman and chief executive Richard Reese told analysts in a conference call. “We obviously won't sell it if we don't get a fair price for it to get a return for shareholders, because it's not putting a drag on us.”

The local business made a loss of $3.2 million in the 12 months ended Dec. 31, according to the latest financial statements lodged with the Companies Office. It made a loss of $2.9 million on $11.3 million of sales in 2009.

IM New Zealand Holdings, the holding company for the New Zealand business, hasn’t turned a profit since Iron Mountain bought the local stake in 2005 with related-party finance costs keeping it in the red. Still, revenue has been stable at between $10 million and $11 million over that period.

Reese said the New Zealand acquisition came with an Australian purchase, and Iron Mountain is better off taking capital out of the investment and finding a “better return” elsewhere.

The U.S. parent cut its forecast revenue growth by US$188 million on the digital business sale and the prospect of selling the kiwi assets. It’s forecasting full-year earnings per share of between US$1.19 and US$1.27.

The shares fell 5.3% to US$31.69 in trading on the New York Stock Exchange, and have climbed 37% this year.

Earlier this year, the company was pressured by investors to make strategic changes after its global expansion plans failed to offer big enough returns. That resulted in the resignation of former CEO and President Bob Brennan.

(BusinessDesk)

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