Rackspace announces sale to Apollo Global for $4.3B

SAN ANTONIO – San Antonio-based Rackspace Hosting Inc. on Friday announced that it has entered into an agreement to be acquired by New York private equity firm Apollo Global Management, LLC for $4.3 billion.

“This transaction will provide Rackspace with more flexibility to manage the business for long-term growth and enhance our product offerings,” Chairman and co-founder Graham Weston said. “We are confident that as a private company, Rackspace will be best positioned to capitalize on our early leadership of the fast-growing managed cloud services industry."

Rackspace's board of directors unanimously approved the transaction and recommends that stockholders vote in favor of the deal.

Rackspace stockholders are to receive $32 per share in cash. The transaction is expected to close in the fourth quarter of this year.

"We are tremendously excited about the opportunity for our managed funds to acquire Rackspace," said David Sambur, Partner at Apollo. "We have great respect for the company's talented employees and their commitment to deliver expertise and exceptional service for the world's leading cloud platforms. We look forward to working with Taylor and the entire management team and Searchlight to help advance Rackspace's strategy and continue the company's strong heritage of innovation."