The board of document storage company Iron Mountain Inc. has agreed to convert the company into a real estate investment trust, or REIT, more than a year after being pressured to do so by an influential shareholder.
“Given that the largest portion of our income is from renting storage space to customers in our more than 64 million square feet of real estate around the globe, we believe conversion to a REIT is the best structure under which to execute our strategy,” chief executive Richard Reese said in a company release on Tuesday.
The conversion will not occur before January, 2014, according to the release, but as part of the process, Boston-based Iron Mountain expects to pay shareholders a “significant portion” of stock and cash worth between $1 billion and $1.5 billion in the fourth quarter this year.
Iron Mountain came under fire in early 2011 from shareholder Elliott Management Corp., a New York investment firm. Elliott urged the company to get out of the digital data business, which had produced lackluster returns. Iron Mountain faced tough competition from companies like EMC Corp. in Hopkinton and IBM Corp.
At first, Iron Mountain resisted Elliott’s demands, enacting a poison pill plan to fend off a possible hostile takeover. But in early 2011, the company acknowledged its own review had cast doubt on the wisdom of its decade-long investment in digital data services. The company’s chief executive, Bob Brennan, was replaced by Reese, who had served as his predecessor.