Headline News, Articles & Advisory Resource
For Your Digital Experience

Syndicated News

 

Apollo Is Considering IPO of Cloud-Hosting Firm Rackspace

  • Firm has held early talks about starting process this year
  • Apollo delisted company in 2016, bought peer Datapipe in 2017

Apollo Global Management LLC is considering an initial public offering of cloud-computing company Rackspace Hosting Inc., people with knowledge of the matter said.

The private equity firm has held early talks with advisers and may seek to begin the process before the end of the year, said the people, who asked not to be identified because they weren’t authorized to speak publicly.

Rackspace could have an enterprise value of as much as $10 billion in a U.S. listing, one of the people said. A final decision hasn’t been made and Apollo could elect to keep the business, the people said.

Apollo took Rackspace private in 2016 for $4.3 billion, equivalent to a price of $32 a share, with peer Searchlight Capital Partners also making an investment. Rackspace completed its purchase of Datapipe Inc. last year, raising an additional $800 million in debt to finance the deal. Datapipe’s previous owner, Abry Partners, kept a minority position in the combined business.

Rackspace has performed very well over the past two years, one of the people said.

A representative for Apollo declined to comment, while Searchlight didn’t immediately respond to messages seeking comment. Rackspace didn’t have an immediate comment.

Rackspace, based in San Antonio, Texas, offers services that help companies and public authorities shift their IT operations to cloud platforms, including Amazon Web Services, Google parent Alphabet Inc. and Microsoft Corp., according to the Rackspace website.
 

View original content: Here