Rackspace To Acquire Datapipe In Largest Deal To Date

Rackspace is to acquire New Jersey-based Datapipe in its largest deal to date, aiming to create a leader in the provision of services across multiple clouds.

Rackspace, based in a former shopping mall in Windcrest, a suburb of San Antonio, Texas, concentrates on helping customers manage cloud-based applications and services across public and private clouds, and it said the deal would allow it to expand rapidly in that area.

Public sector business

While public clouds sell capacity to multiple customers, private clouds involve the management of remote cloud infrastructure hosted for a specific organisation.

The deal also gives Rackspace access to markets and services in which it doesn’t currently operate, including Datapipe’s large public sector business.

“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,” stated Rackspace chief executive Joe Eazor.

Both companies are privately held, with formerly public Rackspace having been acquired and taken private by Apollo Global Management last year, and details of the transaction weren’t announced. Rackspace said the deal would have been difficult to carry out under the company’s old structure.

The deal is expected to close in the fourth quarter, pending regulatory approval, with Datapipe’s majority owner Abry Partners receiving equity in Rackspace.

Datapipe’s public sector customers include the UK’s Cabinet Office, Ministry of Justice and Department of Transport, as well as the US’ Departments of Defence, Energy and Treasury.

China cloud services

It has offices and data centres in areas where Rackspace has little or no presence, including the US’ west coast, Brazil, mainland China and Russia. Rackspace has offices in Australia, the UK, Switzerland, Israel, the Netherlands, India and Hong Kong and data centres in Texas, Illinois, Virginia, the UK, Australia and Hong Kong. Rackspace hasn’t had a west coast office since closing its San Francisco location last year.

Datapipe brings in professional services, software and tooling that add to Rackspace’s offerings, as well as colocation services, something Rackspace doesn’t currently offer. It provides managed services on China’s largest cloud, the Alibaba Cloud.

For its part, Rackspace has experience with Microsoft, VMware and OpenStack private clouds, including services offerings for Azure Stack and VMware Cloud on Amazon Web Services (AWS), managed Google Cloud Platform services and managed services for enterprise applications, including Oracle, SAP and digital marketing and e-commerce tools.

Datapipe was founded in 2000 and has 825 staff and 29 data centres in nine countries, with private-sector customers including Johnson & Johnson, McDonalds and Rubbermaid.

The combined company is to have more than 6,700 staff and have more than $2.4bn (£1.81bn) in annual revenues. Rackspace said its executive team is expected to remain in place following the acquisition and may expand after the deal closes.

Rackspace last week announced the appointment of Lee James to the newly created role of chief technology officer for its EMEA division. James’ experience includes senior positions with Computacenter, BP and BetFair.

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