Rackspace To Be Taken Private By Apollo Global Management In $4.3 Bln Deal

(RTTNews) - Rackspace Hosting Inc. (RAX) said Friday that it reached a definitive agreement with affiliates of certain funds managed by affiliates of Apollo Global Management, LLC (APO), a global alternative investment manager, to be acquired for $32.00 per share in cash. The transaction has a total value of $4.3 billion, which includes the assumption of $43 million of net cash.

Upon completion of the transaction, Rackspace will become a privately held company.

In connection with the transaction, funds managed by Searchlight Capital Partners, L.P. will make a strategic equity investment in the acquired company.

The $32.00 per share cash consideration represents a premium of 38% when 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.

The Rackspace board of directors unanimously approved the agreement with the Apollo Funds and recommends that Rackspace stockholders vote in favor of the transaction.

The transaction is expected to close in the fourth quarter of this year. The transaction 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.