Rackspace returns to the stock market and raises $700M
For its return to the stock market, the multicloud managed service provider Rackspace Technology is content with its price of between $21 for the 33.5 million shares it offers. Its IPO filing submitted to the SEC indicated a range of between $21 and $24 per share.
The American Rackspace had left the Nyse in the summer of 2016 when it was acquired by the investment company Apollo for $4.3 billion. Four years later, still owned by the New York fund, the cloud service provider returns to the stock market. Renamed Rackspace Technology, it leverages its Fabric services platform to provide customers with end-to-end unified multicloud management. Since its takeover by Apollo, it has accentuated its change towards these managed services whereas it was historically rather known as a server and storage space host. Last month, the 6,800-employee, San Antonio, Texas-based company filed its Nasdaq IPO filing with the SEC, offering 33.5 million shares, with a price between 21 and $24. The IPO started on August 4th. Rackspace Technology settled for the entry price of the proposed $21 range to raise $703.5 million, Reuters reported, as investors showed interest in service providers. cloud. The latter have indeed seen many companies turn to their solutions when it was necessary to organize the remote work imposed by the pandemic.
In 2019, Rackspace’s revenue was $2.44 billion with a net loss of $102 million (compared to $470.6 million in 2018). In the 1st quarter of 2020, the supplier generated $652.7 million in revenue with a net loss of $48.2 million. It currently has 120,000 customers worldwide. Its shares will be listed on Nasdaq from today August 5 under the symbol RXT.
The company has been led since April 2019 by Kevin Jones, CEO, and Subroto Mukerji, COO, two former senior executives of DXC Technology Company. In May 2017, Rackspace acquired triCore Solutions, which specializes in the management of business applications, including ERPs from Oracle and SAP. A few months later, it acquired Datapipe, a provider of public and private cloud managed services, hosting provider and operator of colocation services on several continents allowing customers to reduce costs and risks.