Autonomy Acquires Online Backup Division of Iron Mountain


Autonomy has acquired select assets of Iron Mountain’s digital division, including their online backup service.

Assets acquired include digital archiving, eDiscovery and online backup and recovery solutions of Iron Mountain Digital, but not the technology escrow service and a medical records archive service and other smaller operations which were recently shut down.

While this is not big news in the consumer online backup market, in the global arena of corporate online backups, it’s newsworthy.

Autonomy to Acquire Key Iron Mountain Digital Assets

Autonomy’s Cloud Platform to Expand to 25 Petabytes of Customer Data, Allowing Thousands of New Customers Access to Autonomy’s Advanced Technology

CAMBRIDGE, England and SAN FRANCISCO, May 16, 2011/PRNewswire-FirstCall/ — Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software, and Iron Mountain Incorporated (NYSE: IRM), the information management company, today announced a definitive agreement for Autonomy to acquire selected key assets of Iron Mountain’s digital division including archiving, eDiscovery and online backup. For customers, this means access to Autonomy’s advanced technology for information governance in secure, private clouds in data centers around the world.
We are pleased to announce this transaction, one we have been looking at for some time, which will bring significant advancements for customers, commented Dr. Mike Lynch, Group CEO of Autonomy. Processing customer data in the cloud continues to be a strategic part of Autonomy’s information governance business. We look forward to extending regulatory compliance, legal discovery and analytics to a host of new customers as well as enabling the intelligent collection and processing of non-regulatory data from distributed servers, PCs and especially tens of millions of mobile devices. This will afford the opportunity to bring to these customers the power of IDOL’s meaning-based technology.

Dr. Lynch continued, In 2007 we correctly predicted the merging of regulatory archiving and search, and we believe we are now seeing the next phase where the convergence of regulatory archiving, back-up and data restoration with operational processing of data in the cloud is coming to pass. This acquisition makes Autonomy the cloud platform of choice, processing and understanding 25 petabytes of customer information. IDOL will allow significantly more value, analytical insight and return to be generated for our customers from this cloud platform. This places Autonomy at the centre of the changes in the analytics of unstructured data, processing in the cloud-based platforms and desktop virtualization.

We’ve had the opportunity to buy strong assets at an attractive valuation, and through the application of our intelligent IDOL dark server technology will greatly increase the efficiency of this offering. Whilst others may be creating roadmaps around virtualizing the enterprise and processing information in the cloud, Autonomy is already doing it in the world’s largest private cloud platform.

Acquisition Highlights

  • Cash consideration of $380 million (subject to a final working capital adjustment), funded from Autonomy’s existing cash reserves. Post-closing Autonomy expects to have a gross cash balance of at least $700 million.
  • Adds over six petabytes of data under management and more than 6,000 customers to Autonomy’s customer base, bringing Autonomy’s private cloud data to over 25 petabytes and total customer base to over 25,000.
  • Assets acquired include digital archiving, eDiscovery and online backup and recovery solutions of Iron Mountain Digital, but not the technology escrow service and a medical records archive service and other smaller operations which were recently shut down.
  • Active Iron Mountain Digital customers will continue to be supported without disruption.
  • Autonomy to offer Connected, the digital data protection product, to existing Autonomy customers across enterprise server, PC and mobile devices. The addition of this product drives non-regulatory and structured data into our cloud-based information processing platform.
  • Expected go-forward revenues of approximately $130 million to $140 million.
  • Expect to achieve cost synergies of approximately $40 million per annum over the first year from completion, from a combination of efficiencies from utilization of Autonomy’s IDOL server technology and duplicative general and administrative, data center and marketing programs.
  • Restructuring costs of approximately $10 million expected in the two quarters following completion.
  • Acquisition expected to have traditional effect on gross margins and operating margins in first few quarters following completion with the result of slight earnings dilution in the first quarter after close, neutral for the full year 2011, and expected adjusted earnings per share accretion of approximately 15% in 2012. We would expect gross margins and operating margins to return to historical levels within one to two quarters of completion.
  • Moderate brought forward tax losses will be assumed.

Timetable and Financial
The acquisition is subject to regulatory review and customary closing conditions and is expected to close within approximately 45 to 60 days. Based on the Iron Mountain group’s audited accounts for the year ended December 31, 2010, the adjusted OIBDA (as defined in the Iron Mountain accounts) attributable to their full worldwide digital business was $27.5 million, whilst the profits attributable to the acquired assets for the year ended 31 December 2010 are break-even on a pro forma basis.

A teleconference call to discuss the transaction will be hosted at 10:00a.m. BST on 16 May 2011. The call will be available live via webcast over the World Wide Web. To access the live webcast, investors are directed towards the investor relations section of Autonomy’s website, http://www.autonomy.com. Investors should go to the website approximately 15 minutes prior to the start time of the call to register.

About Autonomy
Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, spearheads the Meaning Based Computing movement. IDC recently recognized Autonomy as having the largest market share and fastest growth in the worldwide search and discovery market. Autonomy’s technology allows computers to harness the full richness of human information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice, or video. Autonomy’s software powers the full spectrum of mission-critical enterprise applications including pan-enterprise search, customer interaction solutions, information governance, end-to-end eDiscovery, records management, archiving, business process management, web content management, web optimization, rich media management and video and audio analysis.

Autonomy’s customer base is comprised of more than 20,000 global companies, law firms and federal agencies including: AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Deutsche Bank, DLA Piper, Ericsson, FedEx, Ford, GlaxoSmithKline, Lloyds Banking Group, NASA, Nestle, the New York Stock Exchange, Reuters, Shell, Tesco, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission. More than 400 companies OEM Autonomy technology, including Symantec, Citrix, HP, Novell, Oracle, Sybase and TIBCO. The company has offices worldwide. Please visit http://www.autonomy.com to find out more.

Autonomy and the Autonomy logo are registered trademarks or trademarks of Autonomy Corporation plc. All other trademarks are the property of their respective owners.

Autonomy Financial Media Contact:
Edward Bridges
Haya Herbert-Burns
Financial Dynamics
+44-(0)20-7831-3113
autonomy@fd.com

Autonomy Analyst and Investor Contact:
Derek Brown, Head of Investor Relations
Autonomy Corporation plc
+44-(0)1223-448-000
derek.brown@autonomy.com

Source: Autonomy Corporation plc

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