Iron Mountain Acquires Amsterdam’s Evoswitch in $235M Deal

Iron Mountain has acquired the EvoSwitch data center business for $235 million, gaining entry to the Amsterdam market, one of Europe’s major connectivity hubs. The deal also continues a series of acquisitions for Iron Mountain, which is moving to extend its data center footprint across key global business hubs.

EvoSwitch operates a large colocation facility in Amsterdam, along with land that can support additional data centers. Since its launch in 2007, EvoSwitch has been distinctive for its focus on energy efficiency and the use of renewable power, and operated the Netherlands’ first carbon-neutral facility by using wind, biomass and hydro power.

The company has also been successful, filling its primary 11 megawatt facility in Amsterdam, and owns land that can support and additional 23 megawatts (MW) of capacity. Its existing campus supports more than 50 connectivity and telecommunication providers, including a key node for the Amsterdam Internet Exchange AMS-IX.

“EvoSwitch NL’s focus on security, energy efficiency and its solid track record of continuous uptime is a great fit with our existing data center organization,” said Mark Kidd, senior vice president and general manager, Iron Mountain Data Centers. “When combined with current and potential capacity in Iron Mountain’s existing data center portfolio, our total portfolio now represents more than 285 MW across many of the most attractive and highest net absorption markets in the U.S. and globally.”

Targeting the FLAP Markets

The deal boosts Iron Mountain’s presence in the strategically important FLAP cities (Frankfurt, London, Amsterdam, Paris), following Iron Mountain’s move into London early this year through the purchase of a Credit Suisse data center. The FLAP markets experienced net absorption of more than 21 MW of space in the fourth quarter of 2017

About 45 percent of EvoSwitch’s space is occupied by Leaseweb Netherlands, a cloud hosting company that is a business affiliate of EvoSwitch and will become one of Iron Mountain Data Centers’ top five customers.

The EvoSwitch NL acquisition includes two locations in Amsterdam. The first site includes a 150,000 square foot data center, with 87,000 square feet of existing data halls and 11 MW of existing power capacity. An expansion is underway that will add another 2 MW at the location, with 600 kilowatts pre-leased to Leaseweb. The data center is expandable to a total of 430,000 square feet of space and another 14 MW of data halls, bringing the first location to 27 MW of total potential capacity.

The second location an support a 57,000 square-foot facility including 41,000 square feet of data hall development, providing another 7 MW in potential capacity.

Benefits for EvoSwitch Customers

EvoSwitch CEO Eric Boonstra said that Iron Mountain shares its commitment to customer service and operational excellence, and noted that the deal could provide benefits for EvoSwitch customers.

“This transaction represents an opportunity for us to extend relationships with our existing customers by providing data center expansion capacity in important continental European markets, and the potential to provide capacity in the important Amsterdam region to Iron Mountain’s legacy data center customer base,” said Boonstra.

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In fact, the deal terms include a $25 million future revenue credit to Leaseweb, which can be applied to space leased in other Iron Mountain data centers over the next 10 years.

Iron Mountain has expanded through a flurry of acquisitions, but has also been building new capacity, including a large data center campus in Manassas, Virginia. Today’s transaction doesn’t include space EvoSwitch has leased in Manassas at a COPT data center.

Here’s a quick review of Iron Mountain’s 2017 acquisition activity:

• On July 28, Iron Mountain announced the acquisition of FORTRUST for $128 million. The deal added a 210,000 square foot data center in Denver,  9 megawatts (MW) of existing data center capacity and expansion space for an additional 7 MW.
• On Sept. 18 the company opened the doors on the $80 million first phase of its new data center campus in Manassas, Virginia.  The VA-1 data center is a down payment on a larger commitment to the Northern Virginia market, where Iron Mountain plans to build four facilities totaling $350 million in investment.
• On Oct. 6, Iron Mountain agreed to buy two data centers from Credit Suisse through a sale-leaseback transaction in which the bank will stay on as an anchor tenant, and Iron Mountain will have the ability to lease the 10 MW of surplus space to other tenants.
• On Dec. 11, the company said it will buy IO Data Centers for $1.3 billion, The deal includes data centers in Phoenix, Scottsdale, Edison, N.J. and Columbus, Ohio spanning 728,000 square feet of space and 62 megawatts (MW) of capacity. The IO footprint includes the potential to add another 77 megawatts of space in Phoenix and New Jersey.

Iron Mountain noted that the EvoSwitch acquisition was not part of Iron Mountain’s previously disclosed 2020 plan, but said the deal “supports the company’s goal to accelerate revenue and adjusted EBITDA growth through a shift in mix to faster-growing, higher-margin businesses.”

The transaction will be financed with debt, and values EvoSwitch at 14 times its 2018 EBITDA, excluding integration expense.