Rackspace Officially Goes Private in $4.3 Billion Deal

Photo courtesy of Rackspace

Photo courtesy of Rackspace

It’s the start of a new era for Rackspace, San Antonio’s largest technology company, which Thursday officially became a private company following the completion of its $4.3 billion acquisition by Apollo Global Management, with investment by Searchlight Capital Partners.

Its common stock, under the symbol RAX, will no longer be listed for trading on the New York Stock Exchange, effective immediately, according to a news release.

Apollo acquired Rackspace for $32 per share, a 38 percent premium compared to Rackspace’s closing stock price on August 3, the last day before news reports began circulating about the possible buyout.

“We are excited to begin this new chapter for Rackspace as a private company,” Taylor Rhodes, president and CEO of Rackspace, said in a news release. “I would like to thank our Rackers around the world who, throughout this process, have remained focused on serving our customers. Every day they deliver expertise and Fanatical Support for the world’s leading clouds. We look forward to working with Apollo as we manage Rackspace for long-term growth and expand our early leadership of the managed cloud market. We believe that the best years for Rackspace are yet to come.”

“We are pleased for our managed funds to invest in Rackspace and are excited to be associated with the company and its world class employees, who go to enormous lengths to offer industry-leading expertise and service,” David Sambur, Partner at Apollo, said in a news release. “We look forward to working together with the Rackspace management team and its employees, as well as with Searchlight to help advance Rackspace’s strategy and continue the company’s strong heritage of innovation and customer satisfaction.”

Founded in 1998, Rackspace has a rich history in San Antonio. It grew from just a few employees to more than 6,000 employees worldwide. It went public in 2008. Today, it serves business customers in more than 120 countries with offices and data centers on four continents. It reported 2015 revenue of $2 billion.

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