Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Combination of country’s largest records management services gets conditional U.S. approval, (Mar 31, 2016)

By Jeffrey May, J.D.

Iron Mountain Inc.—the largest records management company in the United States—has agreed to divest records management assets in 15 metropolitan areas in order to proceed with its $2.6 billion acquisition of the nation's second largest records management service—Recall Holdings Ltd. The divestitures required by a proposed consent decree are intended to resolve Antitrust Division concerns raised in a complaint filed today in the federal district court in Washington, D.C. The proposed consent decree is subject to court approval (U.S. v. Iron Mountain Inc., Case 1:16-cv-00595).

Iron Mountain announced its agreement to acquire Recall in April 2015. Iron Mountain and Recall both offer records management services (RMS)–storing, protecting and organizing large volumes of hard-copy records at secure, off-site locations–in many cities across the United States.

According to the government's complaint, the proposed transaction, as initially agreed to by the defendants, would have lessened competition substantially in the provision of records management services (RMS) in 15 relevant markets. Those 15 metropolitan areas are Detroit, Michigan; Kansas City, Missouri; Charlotte, North Carolina; Durham, North Carolina; Raleigh, North Carolina; Buffalo, New York; Tulsa, Oklahoma; Pittsburgh, Pennsylvania; Greenville/Spartanburg, South Carolina; Nashville, Tennessee; San Antonio, Texas; Richmond, Virginia; San Diego, California; Atlanta, Georgia; and Seattle, Washington.

Proposed consent decree. Under the terms of the proposed consent decree, the parties will divest, as viable ongoing business concerns, Recall RMS assets in all 15 geographic markets. In geographic markets other than Atlanta, the defendants intend to divest all of Recall’s RMS assets. In Atlanta, most, but not all, of Recall’s RMS facilities will be divested, since the facilities to be divested have been deemed sufficient to serve all of Recall’s local customers in Atlanta and to compete for new business in the area. In 13 of the 15 markets, the assets will be divested to Access CIG, LLC.

Review by other competition agencies. The transaction is also being reviewed by the Canadian Competition Bureau, the Australian Competition and Consumer Commission (ACCC), and the United Kingdom’s Competition & Markets Authority. Today, the Canadian Competition Bureau said that it has conditioned antitrust clearance on Iron Mountain's agreement to sell a number of records management facilities and customer contracts in six major Canadian cities: Toronto, Montreal, Ottawa, Calgary, Edmonton, and Vancouver.

To resolve the ACCC's competition concerns, Iron Mountain has agreed to divest most of its Australian business, according to an agency announcement. Recall is an Australian company. As of today, the U.K. Competition & Markets Authority's investigation remains open.

Attorneys: Soyoung Choe for U.S. Department of Justice. John Scribner (Weil, Gotshal & Manges LLP) for Iron Mountain Inc. Ken Glazer (Sidley Austin LLP) for Recall Holdings Ltd.

Companies: Access CIG, LLC; Iron Mountain Inc.; Recall Holdings Ltd.

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