Iron Mountain to Pay a 11.7% Special Dividend

Iron Mountain (IRM) announced that it will give shareholders a special dividend of $700 million, or about$4.07 a share, in connection with its plan to convert to a real-estate investment trust.  This is a 11.7% dividend yield.

The dividend is an initial distribution that satisfies a requirement that Iron Mountain pay shareholders its accumulated earnings and profits of about $1 billion to $1.5 billion in connection with its potential conversion to a REIT. The conversion is expected to occur no sooner than the beginning of 2014.

The special dividend is payable on Nov. 21 to shareholders of record on Oct. 22. Shareholders can receive payment of the special dividend in stock or in cash totaling up to $140 million, or 20% of the total distribution.

“Today’s announcement marks an important milestone in our plan to convert to a REIT,” saidRichard Reese, Iron Mountain’s Chairman and Chief Executive Officer. “Iron Mountain is a great business with high returns and strong cash flow driven by consistent financial performance. This special dividend is consistent with our previous commitment to increase shareholder payouts, and our operating as a REIT will further enhance our ability to generate attractive total returns for our stockholders.”