Cloud giant Rackspace goes private

screen-shot-2016-05-10-at-3.35.08-pm-100660431-primary.idgeCloud service provider Rackspace Hosting agreed to be taken private by Apollo Global Management LLC in a deal priced at $4.3 billion. This offer represents a premium of 38.2% to Rackspace’s closing price. Apollo is a company with $186 billion in asset which has been looking forward to step up its investments in technology.

Rackspace leases server space that helps corporations to store and access data in the cloud. The Rackspace focuses on growing its cloud business among rising competition from established companies such as Microsoft, IBM and startups.

Rackspace’s shares were up to 4.3% at $31.50 in early trading. The company was in advanced talks with PE firms for a private deal. Earlier of this month Rackspace was in talk with Apollo, reported by Reuters. Being part of the deal, expected to  close in the fourth quarter, private-equity firm searchlight Partner will make investment in Rackspace.

Rackspace explored for sale several times, since it was announced that it was working with Morgan Stanley to explore strategic alternatives 2 years back