SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 6, 1998
IRON MOUNTAIN INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
0-27584 04-3107342
(Commission file number) (I.R.S. Employer Identification No.)
745 Atlantic Avenue, Boston, MA 02111
(Address of Principal Executive Offices, Including Zip Code)
(617) 357-4455
(Registrant's Telephone Number, Including Area Code)
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Item 2. Acquisition or Disposition of Assets
On January 6, 1998, Iron Mountain Incorporated ("Iron Mountain" or the
"Registrant"), Arcus Group, Inc. ("AGI"), United Acquisition Company ("UAC") and
Arcus Technology Services, Inc. ("ATSI" and together with AGI and UAC, "Arcus")
consummated the transactions contemplated by a certain Agreement and Plan of
Merger (the "Agreement") among Iron Mountain and Arcus, dated September 26,
1997, as amended.
In consideration, Iron Mountain issued approximately 1,438,000 shares of its
Common Stock valued at approximately $50.5 million based upon the closing price
of its Common Stock (NASDAQ: IMTN) on January 6, 1998. In addition, Iron
Mountain issued options to purchase approximately 600,000 shares of its Common
Stock, valued at approximately $12.5 million, assumed net debt of approximately
$32.3 million and paid cash of approximately $65.0 million. Additionally, the
Registrant expects to record approximately $3 million in capitalized transaction
costs and approximately $2 million in additional equity resulting from a higher
valuation of the options to acquire shares of the Registrant's Common Stock for
accounting purposes.
The assets acquired by Iron Mountain include tangible property (consisting
primarily of real property, office equipment, furniture and fixtures, racking
and shelving) and intangible property regularly used in Arcus' records
management and information technology staffing businesses.
As a result of aforementioned transactions, Arcus will record a non-cash
compensation charge of approximately $8 million related to certain stock
options. The charge will be recorded prior to the closing of the transactions in
January 1998.
No other information is provided herewith regarding the merger as the Registrant
has "previously reported" (as defined in Rule 12b-2) substantially the same
information regarding the merger including the related historical and pro forma
financial information, as is required by Form 8-K, in its Registration Statement
on Form S-4, filed on November 26, 1997 (Registration No. 333-41045).
Item 5. Other Events
Legal Proceedings. As previously disclosed, in March 1997 the Registrant
experienced three fires, all of which authorities have determined were caused by
arson. The fires resulted in damage to one and destruction of the Registrant's
other records management facility in South Brunswick Township, New Jersey. The
Registrant has filed several insurance claims related to the fires, including a
significant claim under its business interruption insurance policy. The claims
process is lengthy and its outcome cannot be predicted with certainty.
Some of Iron Mountain's customers or their insurance carriers have asserted
claims as a consequence of the destruction of or damage to their records as a
result of the fires, some of which allege negligence or other culpability on the
part of Iron Mountain. On December 12, 1997, Iron Mountain received notice that
a lawsuit had been filed by one of its customers seeking up to $1 million in
damages. The action has been removed from a state court in New Jersey to the
United States District Court in New Jersey. On December 30, 1997 and January 12,
1998, the Registrant received notices that two additional lawsuits had been
filed, in both cases seeking unspecified damages against the Registrant and to
rescind their written contracts with Iron Mountain. The lawsuits filed to date
represent approximately 60% of the customer cartons destroyed or damaged as a
result of the fires. Iron Mountain denies any liability as a result of the
destruction of or damage to customer records as a result of the fires, which
were beyond its control, and intends to vigorously defend itself against these
and any other lawsuits that may arise. The Registrant is also pursuing coverage
of these claims and proceedings with its various insurers.
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The outcome of these claims and proceedings cannot be predicted. Based on its
present assessment of the situation, after consultation with legal counsel,
management does not believe that the outcome of these claims and proceedings
will have a material adverse effect on Iron Mountain's financial condition or
results of operations, although there can be no assurance in this regard.
The Registrant is involved in litigation from time to time in the ordinary
course of business. In the opinion of management, no material legal proceedings
are pending to which the Registrant, or any of its properties, is subject.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
No financial statements are included herewith as such financial
statements have previously been reported. See Item 2 above.
(c) Exhibits
Exhibit 2.1 Agreement and Plan of Merger, dated as of September
26, 1997, by and among Iron Mountain Incorporated,
Arcus Group, Inc., United Acquisition Company and
Arcus Technology Services, Inc., as amended, is
incorporated by reference to the Registration
Statement on Form S-4 filed with the Securities and
Exchange Commission on November 26, 1997 (Registration
No. 333-41045).
Exhibit 99.1 Press release, dated as of January 7, 1998, by the
Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IRON MOUNTAIN INCORPORATED
(Registrant)
January 13, 1998 By: /s/ Jean A. Bua
(date) Jean A. Bua
Vice President and Corporate Controller
(Principal Accounting Officer)
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EXHIBIT 99.1
Iron Mountain
Corporate Offices
745 Atlantic Avenue
Boston, Massachusetts 02111
[IRON MOUNTAIN LOGO]
FOR IMMEDIATE RELEASE
Contact: Judith R. Brackley
Director of Corporate Communications
(617) 357-4455 ext. 208
e-mail: [email protected]
IRON MOUNTAIN COMPLETES MERGER WITH ARCUS
Boston, MA - (January 7, 1998) - Iron Mountain Incorporated (NASDAQ:IMTN)
announced today the completion of the merger with Arcus Group, Inc. for total
consideration of $160 million, including approximately $63 million in value in
Iron Mountain common stock and options to purchase Iron Mountain common stock,
and the balance in cash and the assumption of debt. In addition to the stated
purchase price of $160 million, Iron Mountain will record approximately $5
million in capitalized transaction costs and additional equity resulting from a
higher financial valuation of the stock options for accounting purposes. The
equity portion of the consideration consisted of approximately 1.4 million
shares of Iron Mountain common stock and options to acquire approximately 600
thousand shares of Iron Mountain common stock.
Arcus Group, Inc. had two operating units--Arcus Data Security, Inc., and Arcus
Staffing Resources, Inc.--which generated total revenues of approximately $69
million for the nine months ended September 30, 1997. Giving pro forma effect to
a recent acquisition, revenues for the same period were $75 million.
According to Iron Mountain Chairman and Chief Executive Officer C. Richard
Reese, the Arcus transaction is a major step in implementing Iron Mountain's
strategy to be the leader in information management services. Already the leader
in the paper records storage and management market, the acquisition of Arcus
catapults Iron Mountain into a leadership position in the market for off-site
data security services, and gives the Company an entry into the related
information technology staffing business. Clarke H. Bailey, the former Chief
Executive Officer of Arcus' parent company, has joined the Iron Mountain Board
of Directors.
Iron Mountain believes that Arcus Data Security, Inc., founded over 25 years
ago, is the largest provider of off-site data security services in the United
States. Arcus Data Security provides off-site storage and rotation of back-up
copies of computer media, as well as related services such as disaster recovery
support and testing, media library moves and media product sales. The company
has 31 locations in 25 US markets and one in the United Kingdom, has
approximately 1,000 employees and serves more than 6,000 customer accounts.
During 1998 Iron Mountain
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will combine its existing data security services business with the Arcus
business, which will continue to operate as Arcus Data Security, Inc., an Iron
Mountain Company.
Arcus Staffing Resources, Inc. provides information technology staffing and
facilities management services. Arcus Staffing Resources operates in fifteen
cities and has approximately 700 direct and billable employees.
Iron Mountain operates 52 markets, providing business records storage and
management services, medical records services, data security services for
electronic records, vital records protection and records management consulting
services. The Company stores and manages billions of paper documents and
electronic records for more than 50,000 customer accounts, including more than
half of the Fortune 500 companies.
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