Rackspace, the cloud hosting provider that serves more than 200,000 business customers from data centers on four continents, has ended its evaluation of alternatives that would result in Rackspace being acquired. The company declared its commitment to remain independent and announced Taylor Rhodes as CEO to lead and drive its managed cloud hosting strategy.
Rackspace had been approached by multiple parties who expressed interest in exploring a strategic relationship, ranging from partnership to acquisition. The board retained Morgan Stanley and Wilson Sonsini Goodrich & Rosati to facilitate a comprehensive review to maximize value for shareholders, customers, and employees. After a comprehensive review, the board decided to terminate M&A discussions.
Based on Rackspace‘s reaccelerated revenue growth and its potential trajectory for the coming year, the board concluded the company is best positioned to maximize shareholder value by executing its strategy as a leading managed cloud hosting company.
The Rackspace board also named company president Taylor Rhodes to chief executive officer (CEO) and member of the board, effective immediately. Graham Weston, co-founder, and chairman of the board, who has been serving as CEO of Rackspace since February, will continue to serve as non-executive chairman of the board.
Complex tools and applications
“We ran a thorough process under the direction of our board of directors, independent advisors, and a Strategic Transaction Committee of the Board,” said Graham Weston, Rackspace co-founder and chairman. “In this process we talked to a diverse group of interested parties and entertained different proposals. None of these proposals were deemed to have as much value as the expected value of our standalone plan. We concluded that the company is best positioned to drive value for shareholders, customers and Rackers through the continued execution of its strategic plan to capitalize on the growing market opportunity for managed cloud hosting services.”
Earlier this year, Rackspace announced a renewed focus on increasing share in the managed cloud hosting market. Rackspace is targeting businesses and developers that trust it to manage not only their cloud infrastructure but also the many complex tools and applications that run on top of that infrastructure, including the latest databases and ecommerce platforms.