Recall delisted from ASX

Recall has been removed from the ASX following a takeover by Iron Mountain.

When it comes to document management company Recall, we abandoned ship too early – and then realised the ship was loaded with hidden gold. Recall’s share price has risen 47% since we downgraded it on 8 Oct 14 (Sell – $5.67). At the time, there were rumours that management was in talks with its main US-based competitor, Iron Mountain, regarding a potential takeover.

However, the company explicitly stated it was ‘not in discussions with Iron Mountain or any other potential buyer’. Seven months later, we find management telling shareholders that the company has reached an agreement to be acquired for $8.50 per share in cash by, you guessed it, Iron Mountain.

Even if the company was in talks, we argued, a deal would be hard to get past the Australian Competition and Consumer Commission (ACCC) and the Antitrust Division of the US Department of Justice. Recall dominates the Australian market with a 57% share, while Iron Mountain is the second-largest operator with a 26% share.

It turns out that neither regulator made a big fuss, perhaps justifying the takeover with the knowledge that the industry faces a huge, growing threat from online cloud storage companies like Amazon. The number of competitors may be falling, but competition is most assuredly rising.  

Recall has now been delisted from the ASX and we are CEASING COVERAGE.

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