Rackspace Tuesday announced that it is no longer for sale and it’s going to remain independent.
The San Antonio-based Web hosting company also named Taylor Rhodes as its new CEO and a member of the board effectively immediately. He’s been with Rackspace for seven years and previously served as its president.
In May, Rackspace announced in papers filed with regulators that it “had been approached by multiple parties who expressed interest in exploring a strategic relationship, ranging from partnership to acquisition.”
Then the company’s board retained Morgan Stanley and Wilson Sonsini Goodrich & Rosati to examine ways to maximize shareholder value.
“After a comprehensive review, the board decided to terminate M&A discussions,” according to a news release. “Based on Rackspace’s reaccelerated revenue growth and its potential trajectory for the coming year, the board concluded the company is best positioned to maximize shareholder value by executing its strategy as the #1 managed cloud company.”
“We ran a thorough process under the direction of our board of directors, independent advisors, and a Strategic Transaction Committee of the Board,” Graham Weston, Rackspace co-founder and chairman, said in a news release. “In this process we talked to a diverse group of interested parties and entertained different proposals. None of these proposals were deemed to have as much value as the expected value of our standalone plan. We concluded that the company is best positioned to drive value for shareholders, customers and Rackers through the continued execution of its strategic plan to capitalize on the growing market opportunity for managed cloud services.”
“The board also considered a share repurchase program and determined that, based on the company’s significant opportunities, it is prudent to maintain flexibility at this time to ensure that the appropriate investments can be made to drive our strategy forward. We will continue to evaluate the benefits of implementing a buyback program in the future,” Weston said.