Rackspace announced plans to open a new data center in Germany to provide customers with a new option for managed IT infrastructure in the face of strict personal data protection laws across Germany, Austria and Switzerland (DACH) territory.
The facility will serve customers who seek managed private clouds and hosting environments, with a focus on fully managed VMware environments.
Rackspace said it will be working with one of its long-standing partners to build out the infrastructure of the new operation, which is expected to be fully operational in mid-2017.
With the addition of the data centre in Frankfurt, Rackspace will operate 12 data centres worldwide, including in London, Hong Kong, Sydney, Dallas, Chicago and Ashburn (near Washington, D.C.).
Under the deal, Rackspace will be acquired for $32.00 per share in cash, representing a premium of 38% compared to Rackspace's unaffected closing stock price on August 3, 2016, the last trading day prior to news reports speculating about a potential transaction. In connection with the transaction, funds managed by Searchlight Capital Partners will make a strategic equity investment in the acquired company. The transaction has a total value of $4.3 billion, which includes the assumption of $43 million of net cash.
Taylor Rhodes, president and CEO of Rackspace, said, "We are presented with a significant opportunity today as mainstream companies move their computing out of corporate data centers 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."
Goldman, Sachs & Co. is acting as financial advisor to Rackspace and Wilson Sonsini Goodrich & Rosati, Professional Corporation is acting as its legal advisor.
- Rackspace, which was founded in 1998 in San Antonio, provides businesses with expertise and exceptional customer service for the world's leading cloud platforms, including AWS, Microsoft, and OpenStack (the open-source cloud platform that Rackspace co-founded in 2010, along with NASA). Rackspace has been publicly traded on the New York Stock Exchange since 2008. The company reported 2015 revenue of $2.0 billion.
- Rackspace collaborated with NASA to develop OpenStack in 2010.