The break-up of Hays, the logistics, personnel and private mail group, has begun with the £200m disposal of its document storage business.
A joint venture between Mentmore of the UK and Iron Mountain of the US is buying the European part of the Hays business for £185.5m while Iron Mountain is paying is paying £14.5m for the US arm.
Hays has attracted a lot of interest after it was put up for auction earlier this year. There were thought to have been at least five bidders for the division in the second round and the price tag is some £40m ahead of analysts' initial estimates of £160m.
The deal adds Belgium and Norway to the list of locations that the Mentmore joint venture covers and strengthens its existing operations in the UK, the Netherlands and Germany.
It comes just days after Mentmore sold its serviced business space division to the property group Ashtenne for £183m - a move that freed it up to focus on personal and document storage.
In the wake of both the transactions, Mentmore said the significance of its joint venture with Iron Mountain had increased "substantially" and that it was in talks with its partner on how best to "recognise the value" of its 49.9 per cent stake. Analysts have speculated that Iron Mountain, which owns the other 50.1 per cent of the venture, wants to buy out Mentmore's holding although the joint venture could also be floated. "Many options are being discussed and there is a commitment from both parties to finding a solution that benefits all," Mentmore said.
Martin Nye, chief executive, said: "The issue for us is that a large part of our group [operating] profit [60-65 per cent] will come from the joint venture... so we want to make sure that value is recognised."
"The language is deliberately vague... we don't want to get drawn on what that might be or might not be and we don't want to get drawn on timescale," Mr Nye said.
Mentmore said yesterday that Iron Mountain would initially provide the pair's joint venture, which was set up in early 1999, with the financing to make the Hays acquisition. The joint venture is, however, preparing separate financing to repay all or some of that funding. As part of the deal, Mentmore has entered into an option agreement with Iron Mountain which, if not exercised by 8 January, could see its 49.9 per cent stake in the joint venture diluted.
- More about:
- Georgia (usa)
- The Netherlands