Graycliff Partners Sell Document Storage Assets

Graycliff Partners has announced the sale of Information Storage Consolidation Company (ISCC) to Iron Mountain. Graycliff is a private equity group with offices in New York and Sao Paulo.

ISCC was headquartered in Carrollton, Texas with locations throughout the Southern and Midwestern United States. They offered physical document storage along with paper shredding and document scanning.

What This Means for The Industry

This type of transaction is becoming more common in the document management industry. A private equity group will buy several independent records storage companies. The goal is to get a geographic footprint over a region. Once they reach a critical mass they are sold to an existing national player.

Iron Mountain must be paying a premium for these locations for Graycliff to earn their expected return. It is unclear whether it is easier to integrate several locations that have been assembled by the equity group. If they had integrated systems over all the locations it would make the increased costs in the sale of the company offset by integration costs.

Customers should be wary of outsourcing their documents to a firm with transitional ownership. Make sure you can get out of any contract if the company is sold. The worst case scenario is the contract changes hands and now your prices are increased and permanent withdrawal fees added in. You are now hostage to a company that had just bought your business but not invested in win-win relationship.

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