Recall Holdings has recommended shareholders accept a $2.7 billion takeover offer that would bring the data management's short tenure as a stand-alone company to an end.
The company, which was spun out from Brambles in December 2013, is set to be taken over by US logistics giant Iron Mountain under a deal that will see shareholders receive 0.17 Iron Mountain shares for every Recall share they own or a cash payment of $8.50 per share.
Recall last year rejected a $2.2 billion offer from Iron Mountain, arguing it undervalued the company but left the door open to further negotiations if Iron Mountain lifted its offer.
Recall chief executive Doug Pertz said the new offer was a substantially better deal for shareholders.
"We feel that it's a good deal for shareholders that appropriately shares the value that will be created in combining the two businesses," he said.
The $8.50 offer price is 33 per cent above the $6.40 Recall was trading at prior to the announcement of Iron Mountain's initial proposal in December.
If the deal goes ahead, Recall shareholders will own around 20 per cent of Iron Mountain, which will establish a secondary listing on the Australian Securities Exchange.
Mr Pertz said the combined company would be able to cut costs significantly over the next two years, and the share-based deal would allow shareholders to benefit from the expected improvement in earnings.
"The combination of Recall and Iron Mountain makes strong commercial sense and offers the potential to create significant value for both sets of shareholders," he said.
The deal is subject to regulatory approval in both Australian and the US, as well as a vote of Recall shareholders.
Recall shares climbed five cents to $7.67 as of 1158 AEST.
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