Iron Mountain Buying ITRenew, Boosting Sustainable Approach to IT Assets

Sustainability and supply chain expertise are growing priorities for data center users and operators. Iron Mountain has strengthened its offerings on both those fronts with its plans to acquire a controlling stake in ITRenew, which decommissions data centers and recycles IT assets.

The deal also provides Iron Mountain with deeper understanding of customer needs in hyperscale computing, a key market segment where ITRenew has built strong relationships.

Iron Mountain will pay $725 million in cash for 80 percent of the shares of ITRenew, with plans to acquire the remaining 20 percent within three years. Those terms set an enterprise value for ITRenew of about $925 million. Iron Mountain is buying the company from private equity firm ZMC, which will exit its position through the transaction, which was announced Friday.

ITRenew was founded in 2000 and has become a leading player in the IT asset disposition market. Some of their largest customers are hardware operators that refresh their servers frequently, and retire equipment that can be reused. IT Renew removes the data from this equipment and repurposes it through its Sesame line of rack-scale solutions built on open architectures.

Demand for this type of pre-owned high-performance hardware has been boosted by the global semiconductor shortage, which has slowed the delivery of new systems.

Asset Management as a Strategic Priority

ITRenew had trailing 12-month revenue of more than $415 million, with a two-year compounded annual growth rate of 16 percent. Iron Mountain believes this growth reflects a larger opportunity in IT asset disposition, which it estimates to be a $30 billion market and growing at an 11 percent annual clip – and even higher in the hyperscale business.

“This strategic transaction marks an important step in advancing Iron Mountain’s position in Asset Lifecycle Management and accelerating our enterprise growth trajectory,” said William Meaney, Chief Executive Officer of Iron Mountain. “ITRenew complements our fast-growing IT Asset Lifecycle Management and Data Center businesses bringing capabilities to serve some of the largest and most innovative companies in the world.”

Following the close of the transaction, ITRenew will become the platform for Iron Mountain’s Global IT Asset Lifecycle Management business, providing end-to-end services to the hyperscale and corporate data center segments.

Boosting The Circular Economy

ITRenew is a leading advocate of a “circular economy” – a closed loop system that provides a longer life for IT equipment, reducing waste and pollution without generating new carbon or pulling scarce resources from the ground.

This approach is gaining currency as the onset of climate change is forcing companies to accelerate their sustainability initiatives. Although renewable energy has been the marquee priority for green computing, recycling is emerging as an increasingly important piece of holistic sustainability solutions.

This aligns with the priorities at Iron Mountain, which has made the environment a key focus, deploying solar power on data center rooftops, tracking the renewable content of its energy sourcing on an hourly basis, and offering more green power options to customers.

“With ITRenew, we become a key player in addressing the global challenge of reducing the environmental impact of IT and data center operations, furthering our commitment to ESG,” said Deirdre Evens, Iron Mountain Executive Vice President, Asset Lifecycle Management.

“With ITRenew, we become a key player in addressing the global challenge of reducing the environmental impact of IT and data center operations.”
Deirdre Evens, Iron Mountain

“More than ever before, it is clear that we no longer need to choose between the planet and profit,” writes Chris Pennington, Director of Energy and Sustainability at Iron Mountain, in a recent column for DCF. “The more sustainable solutions are reducing risks and improving profitability for companies, making for good business practices that can also benefit the communities in which we operate.”

Recycled Assets Improve Edge Economics

Asset lifecycle management is an important component of corporate sustainability. Enterprise companies typically retire hardware after 6 to 9 years, while hyperscale players refresh servers in three years or less. As a result, hyperscale equipment often has plenty of usable life left. Ali Fenn, the president of ITRenew, describes these assets as “certified pre-owned BMWs with 20,000 miles on them.”

“In this increasingly supply-constrained world, there’s another advantage – it is available right now,” Fenn told DCF earlier this year. “We’re hearing enterprises say they’re (facing delays of) six months or eight months. That doesn’t work, because they’re trying to scale their business and it has to go faster, not slower.”

ITRenew has also made early inroads in the market for edge computing, announcing deals to provide pre-owned equipment to customers of EDJX and Vapor IO. These partnerships are designed to bring affordability and improved sustainability to edge computing, which deploys IT assets across a distributed network.

The transaction is expected to close in the first quarter of 2022, subject to regulatory approval and other customary closing conditions.

“We are excited to enter this agreement with Iron Mountain, as the combination will provide us with the scale and global footprint to achieve our vision and deliver long-term growth,” said Aidin Aghamiri, Chief Executive Officer of ITRenew.