That’s epitomized by a decision in the late 1990s, when the company’s co-founders-Richard Yoo, Dirk Elmendorf, and Pat Condon-transitioned the business from being an Internet service provider and app developer to doing Web hosting.
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“Rackspace faces a big opportunity as the early leader in the fast-growing managed cloud services industry”.
The $32.00 per share cash consideration represents a premium of 38% when compared to Rackspace’s unaffected closing stock price on August 3, 2016, the last trading day prior to news reports speculating about a potential transaction.
The deal needs to get the approval of shareholders and regulators.
Founded in 1998, Rackspace is one of San Antonio’s largest technology companies with about 5,000 employees worldwide.
“The team at DH Capital did a terrific job throughout this process to create the outcome we were seeking”, said Matt Bradley, Vice President of Corporate Development & Strategy for Rackspace.
But respite from the scrutiny borne by any publically traded company could provide false comfort to Rackspace customers, Aden said, adding he wouldn’t be surprised if ultimately the private equity acquisition will prove more beneficial to rival services providers in the Amazon ecosystem. The companys products and services include charge and credit card products; network services; expense administration products and services; travel-related services; and stored value/prepaid products.
Rackspace’s acquisition by certain funds that are managed by Apollo Global Management, LLC would allow the company to provide extra flexibility and help deliver multi-cloud services, as demanded by its customers. Advisory Services Network LLC raised its stake in shares of Rackspace Hosting by 10.3% in the second quarter.
Earlier this month rumors resurfaced that Rackspace was exploring private equity.
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For some 300,000 business customers worldwide, Rackspace builds and manages cloud-based IT infrastructures-public, private, or dedicated-that are hosted by its 11 data centers. At the time some industry observers even viewed the company as a potential competitor to AWS, though it never had almost the same kind of resources as AWS and never truly became a legitimate competitor to the market leader.
