Rackspace Going Private In $4.3B Purchase By Private Equity Firm Apollo
Rackspace, San Antonio’s leading tech company, is going private. The company is being purchased by private equity firm Apollo Global for $4.3 billion. Rackspace CEO Taylor Rhodes said in a statement the company will be keeping its name and remain in San Antonio.
Bexar County Judge Nelson Wolff says Apollo has a reputation of trying to grow companies and Rackspace is far from broken. “Rackspace is profitable. They’re well-run, they have opportunity for some growth, and I think Apollo sees that. There’s a big advantage in not being a public corporation and not seen the public eye every day, you save a lot of money.”
Wolff says he doesn't expect to see a loss of jobs. Rackspace is a driving force in San Antonio’s Tech ecosystem and has resulted in former employees starting their own businesses. Geekdom is a downtown shared working space for small tech companies. Its chief operating officer David Garcia says he doesn’t believe there will be any negative changes with the new ownership. “We’re going to still see continued growth in San Antonio. I think the partnership that we have with Geekdom and Rackspace will continue to flourish and grow. I’m looking forward to seeing what happens.”
Rumors of the buy had been circulating since early August which led to an increase in stock value. Apollo will pay shareholders $32 per share in the sale, which is expected to close by the final quarter of this year. Rackspace is located in the former Windsor Park Mall on Walzem Road.