S&P Lifts Outlook on Iron Mountain (IRM) to Positive Following Recall Holdings Acquisition Announcement

Standard & Poor's Ratings Services said it affirmed the 'B+' corporate credit rating on Iron Mountain (NYSE: IRM) and revised the outlook on the company to positive from stable.

"The positive rating outlook reflects our view that the acquisition of Recall could improve the scale and geographic diversification of the company," said Standard & Poor's credit analyst Jawad Hussain.

The positive rating outlook on Iron Mountain reflects our view that the acquisition of Recall could lead to an improvement in our assessment of the company's business risk profile due to the increased size, scale, and geographic diversification of the combined company as well as the potential for the acquisition to reduce leverage to the low-5x area.

We could raise the rating if the combined company's increased scale and geographic diversification lead to increased operating efficiency as a result of significant synergies and increased exposure to faster growing international markets. We also expect the acquisition to result in leverage decreasing to the low-5x area due to the large equity component that is financing the transaction.

We could revise the outlook to stable if the merger does not occur due to regulatory concerns or if the company is forced to make large divestitures reducing the potential synergy benefits and increased international exposure. We could also revise the outlook to stable if the cash component financing the transaction increases significantly keeping pro forma leverage in the mid-5x area.

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