Rackspace going private in $4.3 billion deal

eva2000 · Aug 27, 2016

Looks like more changes for Rackspace going private Cloud giant Rackspace goes private in $4.3 billion acquisition | VentureBeat | Business | by Paul Sawers Wonder what that means for their future pricing ?

Cloud services giant Rackspace has been acquired by “affiliates of certain funds” under global investment manager Apollo Global Management in a deal worth $4.3 billion.

Founded in 1998, San Antonio-based Rackspace provides a range of services aimed at enabling businesses to operate in the cloud. The company has traded on the New York Stock Exchange (NYSE) since 2008, but the acquisition announced today is essentially a means to take Rackspace private again.

Shareholders will be offered $32 a share in cash. The company says this equates to a 38 percent premium on Rackspace’s closing stock price on August 3 — the day before acquisition rumors first started to circulate. Indeed, it was these rumors that caused Rackspace’s stock to soar past the $30 mark, and is why it’s not using more recent numbers to convey the premium to shareholders.

While the Rackspace board of directors have already approved the deal, shareholders haven’t, though it’s expected that they will, given the company’s decline over the past few years. Indeed, the company’s shares hit a high of around $80 in 2013, but it’s been in steady decline since then, hitting a low of $18 in February this year.
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eva2000 · Aug 27, 2016

More info at Why Rackspace is Becoming a Private Company

This is a big day at Rackspace, with ourannouncement that we intend to become a private company owned by a group of investors led by Apollo Global Management. We expect that this transaction will help us better serve our customers in 120 countries, who now include more than half of the Fortune 100. It will allow us additional flexibility to enhance the multi-cloud services that today’s customers demand, and to seize the big opportunity that we face as the world’s #1 managed cloud company.

Our primary partner in this transaction, which has been unanimously approved by the Rackspace board of directors, is Apollo Global Management, one of the world’s leading alternative investment managers. Apollo has assembled a group of investors and together Apollo and those investors will own Rackspace, upon closing of the transaction. Apollo has led transactions to take private ADT Security Services, the Fresh Market grocery chain, McGraw Hill Education (formerly a textbook publisher and now a leading online education company) and Sirius Satellite Radio (now Sirius XM). Apollo has given its portfolio companies the flexibility to invest their resources in long-term strategies that have powered them to new heights of success.

Apollo strongly supports our managed cloud strategy. It has asked our management team to continue to lead the company, with me as president and CEO.

Apollo has agreed to pay Rackspace stockholders $32.00 a share, for a premium of about 38% over Rackspace’s closing stock price of $23.16 as of August 3, 2016, the last trading day prior to news reports speculating about a potential transaction. This transaction will require the approval of stockholders, and of regulators. We expect to secure those approvals and close the deal sometime in Q4.
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eva2000 · Nov 6, 2016

it's official now It's Official: Rackspace Goes Private, Hopes to Rekindle 'Entrepreneurial Spirit'

Rackspace officially became a private company again Thursday morning after filing the final paperwork to close its deal with Apollo Global Management. Rackspace shareholders approved the deal on Wednesday.

The shares were purchased by a variety of funds, most of which are under the general umbrella of Apollo, and are identified as “affiliates of funds affiliated with Apollo” in the announcement. Searchlight Capital Partners also acquired a stake in Rackpsace as part of the deal, which pays $32 per share, as expected.
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