Iron Mountain and ediscovery firm Stratify have enjoyed close links for some time. Now Iron Mountain's splashed the cash to acquire its former partner in a blockbuster US$ 158 million deal.
This marks the latest stage in Iron Mountain's comprehensive business evolution. Once regarded as little more than a records storage company, it's been spending big on acquisitions poised to help it become the industry-beating digital records management service provider. These guys have capital and are not afraid to spend it. Iron Mountain swallowed Accutrac in June before snapping up RMS Services (a hospital records firm) just last month.
So how will Stratify assist in the bigger picture?
Stratify provides data investigation software for law firms and corporations with extensive legal requirements. Specifically, it optimizes record data according to, for instance, compliance criteria. Stratify also ensures that when lawyers come calling regarding any particular records, those records are readily accessible.
Its products also supply support for workflow and analysis tools, as well as processing modules which aid investigators to review digital documents quickly.
Why should you care?
Picture this: You're the CEO of a Fortune 500 company. An employee is suing you because one of your managers allegedly sexually harassed her, and the case has been ongoing since 2003. She just remembered that sometime between August and October 2002, the manager in question was making some salacious comments via IM.
Bear in mind that all electronic communications moving through your company must be stored in the event of a lawsuit, per eDiscovery. Get the picture yet?
Depending on how records are maintained at your firm, you may or may not have to hire a team of attorneys to sluice through such records to prove/disprove the claim. If these records are optimized for such work, it's going to cost you a lot less. And the quicker these US$ 100-haircut leeches can organize these records, the better.
And any software that helps you help them organize your records more quickly will be your fast friend.
News of the takeover comes hot on the heels of stunning financial results from Iron Mountain, particularly for a company in a transitory phase. Sales of US$ 702 million in Q3 netted the company profits of over US$ 50 million, well ahead of analyst expectations.
While the bulk of these earnings still come from its paper-records management business, the digital records arm continues to grow apace.
The Stratify deal will herald a renewed burst of acquisitions: Iron Mountain plans to spend between US$ 500m and US$ 1.5bn on M&A over the next five years.