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Iron Mountain (IRM) to Buy Frankfurt Data Center From Calcium DC

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Iron Mountain Incorporated (IRM - Free Report) has inked an agreement to acquire a data center in Frankfurt from Singapore-based Calcium DC Pte. Ltd. The move comes as part of the company’s effort to boost its EMEA data-center footprint. The EUR 76-million deal, expected to close within the next three months, is subject to customary closing conditions.

The two-story, 20,000-square-meter colocation data center site is located in the Am Martinszehnten Industrial Park, near to the city center and Frankfurt Airport. Presently, the facility has 2.6 megawatts of leased capacity and 8 megawatts of capacity available for retail colocation customers. Also, there is an option to expand for the addition of Edge computing at the site. The facility provides robust network connectivity, including access to preeminent internet exchange (IX) operator DE-CIX.

With the acquisition of this second data center, which adds 10.6 megawatts to meet enterprise, edge & hyperscale customer demand in this critical global data-center market, Iron Mountain will have a robust foothold in the Frankfurt market, including a 27-megawatt pre-leased facility in Frankfurt (FRA-1).

Backed by its position as one of Europe’s major commercial and financial hubs, Frankfurt has a solid global data-center market. It also offers rich connectivity to network fabrics and service providers as well as a strong power supply.

Apart from this, last month Iron Mountain announced the expansion of its data-center footprint in London with a new 27-megawatt built. The company also added 4 megawatts of new capacity at its LON-1 data center, bringing the total power capacity at the facility to 9.1 megawatts.

The latest moves will help the company bank on the encouraging demand for connectivity, interconnection and colocation space, and drive leasing activity. The development is in line with Iron Mountain’s efforts to supplement its storage segment’s performance with expansion in its faster-growing businesses, the most notable being the data-center segment. As such, focus on data-center portfolio expansion will diversify the company’s revenue mix and improve adjusted EBITDA margins.

Along with increased spending on “digital office spaces” amid the pandemic-induced remote-working wave, growth in cloud computing, Internet of Things and big data are spurring demand for data-center REITs, including Equinix, Inc. (EQIX - Free Report) , CyrusOne Inc. (CONE - Free Report) and CoreSite Realty Corporation (COR - Free Report) .

However, diminishing preference for archiving original hard-copy documents and shifts in data storage through non-paper based technologies is hurting physical storage volume. Considering storage and records management businesses are core segment for the company, this is a primary concern as it is reducing service activity levels and records management volume.

In the past six months, shares of this Zacks Rank #3 (Hold) have appreciated 49.8%, outperforming the industry's 21.4% growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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