The deal is done.
New York-based private equity firm Apollo Global Management has officially acquired Rackspace Hosting Inc. for $4.3 billion, stated President and CEO Taylor Rhodes in a company blog post Thursday morning.
The sale received a vote of approval from stockholders on Wednesday, who cashed out at $32 per share, a 38% premium. Rackspace was one of San Antonio’s largest publicly traded company.
“Our headquarters proudly remain in San Antonio, the city where we were founded nearly 18 years ago and that has helped nurture our growth from a tiny startup to a $2 billion-a-year global company,” Rhodes stated. “We will continue to be actively engaged in volunteer work and support for the community here and in the dozen other cities where we do business across the U.S. and around the world.”
Rackspace, a startup in 1998, was founded by Richard Yoo, Pat Condon, Dirk Elmendorf, Morris Miller, and Graham Weston. It now has more than 6,000 employees worldwide, including about 4,000 employees who work at its headquarters in Windcrest, the small suburban city located on San Antonio’s far-northwest side.
Growing competition in the cloud computing service world, once dominated by Rackspace, has led to wavering stock prices in recent years.
“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,” Apollo partner David Sambur stated in a Rackspace news release.
Apollo, which has offices around the world, has acquired ADT Corp., the Fresh Market grocery chain, McGraw Hill Education, Sirius XM, and “specializes in reviving consumer brands,” according to the New York Times.
Searchlight Capital Partners, L.P., a global private investment firm, also invested in the transaction, according to the news release.