Bill Meaney, president and CEO of Iron Mountain (NYSE: IRM), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Iron Mountain, which is included in the S&P 500 Index, is a storage and information management company. The company converted to a REIT earlier this year. Meaney noted that Iron Mountain elected to become a REIT because it best suited the company’s capital allocation model and allowed it to effectively double its dividend.
In terms of Iron Mountain’s primary drivers of growth, Meaney stressed the importance of increasing its share of the domestic storage market. “Even in a relatively mature market like North America, document origination and creation continues to grow,” he said.
Meaney pointed out that Iron Mountain has strengthened its presence in North America by reorganizing its sales force and getting a better understanding of its customer needs. As a result, the firm’s customer churn rate is less than 2 percent, he said.
Iron Mountain is also targeting the midsize and small business sector in North America, considered to be the fastest-growing storage opportunity, Meaney said. He explained that the company adopted a more local sales strategy about a year ago with its staff acting more as owner-operators. “That’s starting to show some success,” he said.
At the same time, Iron Mountain is looking to expand its presence outside North America, particularly in emerging markets, Meaney said. He noted that the company is also focusing on new areas for growth. That includes the development of an emerging data center business, which Iron Mountain expects will maintain rates of return on capital in the low teens.
Iron Mountain is also examining opportunities beyond information storage, Meaney explained. The company is already storing core oil and gas samples, and a number of hospital groups are now asking to store pathology samples.
“Those are the types of things that are beyond the horizon in terms of building additional growth for the company,” Meaney said.