Rackspace going private in $4.3 billion deal

Managed cloud company Rackspace has entered into a definitive agreement with Apollo Global Management, to be acquired for $32.00 per share in cash, for a total of $4.3 billion. In connection with the transaction, funds managed by Searchlight Capital Partners will make a strategic equity investment in the acquired company. Upon completion of the deal, Rackspace will become a privately held company. 

The transaction is expected to close in the fourth quarter of this year, and is subject to the conclusion of the applicable antitrust waiting periods in the United States, the European Union and Israel, stockholder approval, and other customary closing conditions.

Financing is being provided by Citigroup, Deutsche Bank, Barclays and Royal Bank of Canada. PSP Investments Credit has also committed to provide a portion of the financing. Citigroup, Deutsche Bank, Barclays and RBC Capital Markets are acting as financial advisors to Apollo. Paul, Weiss, Rifkind, Wharton & Garrison is acting as legal advisor to Apollo.

Goldman Sachs is acting as financial advisor to Rackspace and Wilson Sonsini Goodrich & Rosati, is acting as its legal advisor. Morgan Stanley also provided services in connection with the transaction.

[Image courtesy: Rackspace]

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