Rackspace buys Datapipe to expand in multi-cloud managed services

Wednesday 13 September 2017 | 16:56 CET | News

Rackspace has agreed to buy Datapipe, a provider of managed cloud services for the enterprise, in what will be the company's largest acquisition to date. Pending regulatory approvals, the transaction is expected to close in the fourth quarter. All Datapipe employees will be welcomed. No further financial details have been disclosed.  

With the deal, Rackspace said it will be able to meet growing demand for managing multiple clouds at scale. Datapipe will bring experience serving high-profile public sector customers, including the US Departments of Defense, Energy, and Treasury, as well as the UK Cabinet Office, Ministry of Justice, and Department of Transport. It provides professional services, software and tooling that will help better serve enterprise customers and data centres and office where Rackspace has little or no presence, including the West Coast of the US, Brazil, mainland China, and Russia. Rackspace will also gain traditional colocation services across four continents, reducing cost and risk for customers moving applications out of their corporate data centres, as well as managed services on the Alibaba Cloud, the largest in China.

For Datapipe customers, Rackspace will bring its experience in Microsoft, VMware, and OpenStack private clouds, including new service offerings for Azure Stack and VMware Cloud on AWS. It will provide a managed Google Cloud Platform and services for enterprise applications, including those in the Oracle and SAP ecosystems, and those used in digital marketing and ecommerce. 

Both companies are privately held, with Rackspace owned by affiliates of certain funds of Apollo Global Management and certain co-investors. The majority owner of Datapipe, Abry Partners, will receive equity in Rackspace. Citigroup is acting as sole financial advisor to Rackspace in the transaction and has committed to provide incremental senior secured credit facilities, which will be used in part to refinance Datapipe debt.

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