Restore plc announced in November 2015 that it has agreed to acquire the records management business of Wincanton plc (Wincanton Records Management) for a consideration of £55.7m. This move is part of Restore’s stated strategy of consolidating the Records Management market; it further strengthens Restore’s market position in UK records management and creates a significant presence for them in the Republic of Ireland.
Restore are the largest UK owned and managed records management business in the UK and this acquisition further challenges the American owned Iron Mountain who currently hold the top spot as the largest company the sector.
This acquisition makes sense for Restore as they have gained some very good facilities, extra capacity, some high quality clients, and a good foothold into the Republic of Ireland market. It also removes a major competitor from the market.
Document storage has in the past attracted a variety of companies who had excess space available and racking that space out, filling it with box storage seemed like easy money. The problems came when the initial space/facility was full and further space was needed to deal with organic growth. Dealing with that growth could be expensive and require deep pockets. The high capital costs of new facilities and the high acquisition costs of large new customers make rapid growth an expensive business, too expensive even for businesses like Wincanton.
The search for the Holy Grail of the ‘paperless office’ still eludes us, and despite regular claims that the death knell of paper storage is about to ring, the growth of off-site document storage continues.
There is a growing recognition by customers that even boxes of paper may contain important and ‘sensitive’ data and organisation have a responsibility to protect and control those records, consequently customers have become much more demanding about who stores their off-site data and the condition of the facilities. Old damp warehouses, unused barns or agricultural ‘sheds’ are no longer acceptable.
Some smaller off-site storage operators have risen to the challenges and provide good facilities for document storage and excellent personalised service and continue to grow their businesses. Other smaller operators have seen the writing on the wall and chosen to cash in and sell their businesses.
In the past couple of years, in addition to the sale of smaller regional businesses, we have seen a consolidation among some of the larger players. This acquisition of Wincanton along with last year’s break-up of the Cintas Records Management business and this year’s acquisition of Recall by Iron Mountain have reduced the choice of suppliers with National coverage.
A further consolidation in document storage suppliers seems likely and this reduction in choice will inevitably put upward pressure on prices.
This is a classic example of where ERA’s intimate knowledge of a specific market and the options available can assist our clients. Whether its paper or electronic records, ERA can help put in place long term lower cost solutions for our clients that meet all of their information governance requirements.