Menu
Rackspace IPO price said to be at bottom of target range

Rackspace IPO price said to be at bottom of target range

The company had aimed to sell 33.5 million shares at a target price range of US$21-US$24 per share.

Kevin Jones (Rackspace Technology CEO)

Kevin Jones (Rackspace Technology CEO)

Credit: Rackspace Technology

Cloud services firm Rackspace Technology Inc has priced its initial public offering (IPO) at US$21 per share, the bottom end of its target range, to raise US$703.5 million, according to two people familiar with the matter.

The IPO valued San Antonio, Texas-based Rackspace, which is owned by private equity firm Apollo Global Management, at US$4.18 billion, excluding debt. The company had aimed to sell 33.5 million shares at a target price range of US$21-US$24 per share.

A representative for Rackspace declined to comment.

The IPO bucks the recent trend of strong appetite from investors for cloud computing companies as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow.

Other cloud companies such as Ncino Inc and Kingsoft Cloud Holdings Ltd have seen their share prices more than double since going public earlier this year.

Rackspace leases server space and helps corporations store and access data in the cloud. The company had been exploring an IPO for the last two years, but its weak organic growth and large debt pile, accumulated as a result of its US$4.3 leveraged buyout by Apollo in 2016 and subsequent acquisitions, had stopped it from pursuing it.

Shares in Rackspace, which was publicly listed before being bought by Apollo, are due to begin trading on the Nasdaq on Wednesday under the symbol "RXT."

Goldman Sachs & Co, Citigroup Global Markets and J.P. Morgan Securities LLC are among the underwriters on the IPO.

(Reporting by Joshua Franklin in Boston and Greg Roumeliotis in New York; Editing by Jonathan Oatis and Aurora Ellis)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments