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Rackspace goes private in $4.3 billion acquisition deal

Rackspace, one of the world's leading providers of managed cloud products and services, is to become a privately-owned company in a deal worth $4.3 billion (£3.28bn).

The firm has reached an agreement with affiliates of a number of investment funds, managed by Apollo Global Management, a leading global alternative investment manager, to be acquired for $32 per share in cash. Funds managed by Searchlight Capital Partners will also make a strategic equity investment in Rackspace as part of the deal.

Rackspace intends to finalise the deal in the fourth quarter of the year, with its board and independent advisers having determined that going private will help to deliver gains for shareholders, while providing its management with greater flexibility to pursue its long-term growth strategy and expand its range of products.

Founded in 1998, the company provides services for the world's leading cloud platforms, including AWS, Microsoft, and OpenStack, and works with business customers in more than 120 countries.

It reported 2015 revenue of $2 billion and is recognised as a market leader within its industry - a position it hopes to consolidate by going private. The firm has been publicly traded on the New York Stock Exchange since 2008.

Taylor Rhodes, president and chief executive officer of Rackspace, said: "We are presented with a significant opportunity today as mainstream companies move their computing out of corporate data centres 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. This is an exciting transaction for Rackspace and we look forward to working closely together."

The acquisition deal remains subject to securing the relevant regulatory approvals in the US, the EU and Israel, as well as achieving sign-off from stockholders and other customary closing conditions.

Written by for Comms ExpressADNFCR-1186-ID-801824412-ADNFCR

Rackspace goes private in $4.3 billion acquisition deal - Article Discussion

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