Practically 6 years after going personal, Rackspace is when again dipping its toes into the general public market by filing for an IPO in the US.
The cloudy biz’s stock market debut was in August 2008– yeah, not fantastic timing– and its shares lost about a fifth of their worth. In 2016, private equity group Apollo Global Management coughed up $4.3 bn to take the bit barn proprietor personal again, laid off some personnel, saw it altered CEO a couple of times, and made acquisitions and adjustments to shift Rackspace into a cloud service company.
” Rackspace Innovation has applied for listing its typical stock on the Nasdaq Global Select Market under the ticker sign RXT,” it said in a statement today. (FYI: Rackspace used to be trade on the New York Exchange as RAX).
Rackspace changes name to– drum-roll please– ‘Rackspace Innovation’
That valuation will be crucial. Early reports recommend the company is imagining a market cap of $10 bn, which appears high for a sub-tier-one gamer in the cloud management sphere, particularly because Rackspace Technologies, as it has been known since June, has a big debt stack left over from Apollo’s leveraged takeover.
The coronavirus pandemic might have been a huge increase to Apollo’s plans to take Rackspace public, considering that the substantial bump in locked down house employees has actually seen the demand for cloud-provisioned systems proliferate.
” Work-from-home service expansion is likely to continue for the next few quarters but it’s tough to see it supporting a long-term growth strategy,” Charles King, creator of expert house Punt-IT informed The Register
” In addition, most other hosting services and cloud gamers are targeting at that exact same group so the competitive landscape for Rackspace looks pretty intense.”
Investors might also be motivated by the strategic partnership contract Rackspace signed with cloud leviathan AWS on Wednesday. The deal will open up new global markets for Rackspace services all over the world, piggybacking off AWS.
” By enhancing our relationship with AWS, our preferred cloud provider, it makes it much easier for our clients to speed up the worth they realize from the cloud,” said Matt Stoyka, primary services officer at Rackspace Technology.
” AWS continues to innovate its cloud solutions and we are happy to participate in a Strategic Partnership Agreement to bring these solutions to our cumulative customers.”
A full appraisal of the business is anticipated shortly, no date has been set for the IPO, and it’s subject to regulative approval. Goldman Sachs will deal with the share issue. ®