Multi-cloud managed services company, Rackspace has signed an agreement to acquire Datapipe which is a provider of managed services across public and private clouds, managed hosting and colocation. This acquisition brings important new capabilities to Rackspace and will enable the company to better serve customers of all kinds, globally and at scale.
Pending regulatory approvals, Rackspace’s acquisition of Datapipe is expected to close in Q4 2017. Rackspace will develop a comprehensive integration plan and will take great care to maintain and enhance the exceptional customer outcomes that both companies are known for. Rackspace looks forward to welcoming the talented employees from Datapipe.
RackSpace helps businesses tap the power of cloud computing without the complexity and cost of managing it all on their own. Rackspace engineers deliver specialized expertise, easy-to-use tools, and Fanatical Support for leading technologies including AWS, Google, Microsoft, OpenStack, Oracle, SAP and VMware.
On the development, Joe Eazor, CEO of Rackspace, said:
Our customers are looking for help as they spread their applications across public and private clouds, managed hosting, and colocation, depending on the blend of performance, agility, control, security, and cost-efficiency they’re seeking.
Commenting on the acquisition, he said:
With the acquisition of Datapipe, we’re very pleased to expand the multi-cloud managed services we provide our customers, while also opening doors to new opportunities across the globe.
The company serves customers in 150 countries, including more than half of the FORTUNE 100. Rackspace was named a leader in the 2017 Gartner Magic Quadrant for Public Cloud Infrastructure Managed Service Providers, Worldwide and has been honored by Fortune, Forbes, and others as one of the best companies to work for.
Founded in 2000, Datapipe is a pioneer in managed public cloud services. It is a growing and profitable business, based in Jersey City, N.J., with 825 employees and 29 data centers in nine countries. Datapipe serves the complex needs of many large enterprises, including Johnson & Johnson, McDonalds and Rubbermaid.
On the acquisition, Robb Allen, founder, and CEO of Datapipe, said:
We are very proud of the business we have built and the innovations and successful customer outcomes we have been recognized for, and the future of Datapipe will be even brighter in combination with Rackspace.
He further added that:
The combination of complementary capabilities and resources from both of our companies will create the world’s leading provider of multi-cloud managed services
Rackspace and Datapipe are remarkably similar. Both companies have been positioned as leaders in the Gartner Magic Quadrant assessments of providers of managed cloud services, and in industry rankings by Forrester and other leading analyst firms.
Moreover, both companies are known for their technical expertise and managed services across multiple clouds, exceptional customer service, profitable growth, and engaged workplace cultures. Rackspace intends to build on the industry leadership the two companies have established in reliability and support, to create a new level of end-to-end customer experience.
Both companies are privately held, with Rackspace owned by affiliates of certain funds of Apollo Global Management, LLC and certain co-investors. The majority owner of Datapipe, Abry Partners, will receive equity in Rackspace. No additional terms or details of the transaction will be publicly disclosed.
Brian St. Jean, Partner at Abry, described this transaction as:
A measure of our confidence in the bright future of Rackspace when combined with Datapipe.
Citigroup is acting as sole financial advisor to Rackspace in the transaction and has committed to provide incremental Senior Secured Credit Facilities, which will be used in part to refinance Datapipe’s existing indebtedness and pay related fees and expenses. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Rackspace.
Barclays and DH Capital are acting as financial advisors in the transaction to Datapipe. DLA Piper LLP is acting as legal advisor to Datapipe.