Rackspace shakes up cloud strategy in new $4.3 billion deal
Rackspace is preparing to go it alone, following a $4.3 billion deal with Apollo Global Management that will see the managed cloud firm become a privately held company.
The move is expected to provide Rackspace with additional flexibility to manage the business for long-term growth and enhance its product offerings.
Rackspace co-founder and chairman of the board, Graham Weston, says the transaction is the result of diligent analysis and deliberations by the board over many months, and will deliver ‘immediate, significant and certain’ cash value to stockholders.
“We are confident that as a private company, Rackspace will be best positioned to capitalise on our early leadership of the fast-growing managed cloud services industry,” he says.
Taylor Rhodes, president and CEO of Rackspace, says the deal presents Rackspace with a ‘significant opportunity’ as mainstream companies move their computing out of corporate data centers and into multi-cloud models.
“Apollo and its partners take a patient, value-oriented approach to their funds' investments, and value Rackspace's strategy and unique culture,” says Rhodes.
“This is an exciting transaction for Rackspace and we look forward to working closely together."
The transaction is expected to close in the fourth quarter of this year.