Rackspace confirmed previous rumors that it is planning to go public again, just four years after closing a deal to become a private company and 12 years after its previous initial public listing.
The US-based company, which leases server space and helps corporations store and access data in the cloud, announced Friday that it had filed a proposed IPO with the Securities and Exchange Commission. It didn't specify how much it aims to raise, only listing the $100 million placeholder figure. It plans to list on Nasdaq under the symbol RXT.
In 2016, Rackspace went private in a $4.3 billion deal with investors led by funds affiliated with Apollo Global Management in order to gain freedom to execute on a long-term strategy. It first went public in 2008.
Reuters had already reported in April that Apollo was preparing to take Rackspace public in an IPO that could value the company at more than $10 billion, including debt. According to the news agency, the company had been exploring an IPO for the last two years, but was hampered by weak growth and debt following the Apollo buyout and subsequent acquisitions.
It seems that Rackspace is now hoping to benefit from the recent focus on remote working and reliance on cloud computing as a consequence of lockdowns during the COVID-19 pandemic. Reuters reported that Apollo has been "emboldened" by the rally in the shares of Rackspace peers such as Fastly and Datadog in recent weeks.
For the year ended December 31, 2019, Rackspace reported revenue of $2.4 billion and a net loss of $102.3 million. For the quarter to March 31, 2020, it reported revenue of $652.7 million and a net loss of $48.2 million. At the end of March, outstanding debt stood at $3.98 billion, of which just over $3 billion was attributable to the Rackspace acquisition in 2016.
For more on this topic, see:
- Rackspace finalizes deal to go private
- Rackspace names third CEO in two years
- Rackspace taps Kevin Jones as new CEO
- Rackspace climbs the cloud stack
- Rackspace Snaps Up Salesforce Specialist RelationEdge
- Rackspace Launches Kubernetes-as-a-Service
— Anne Morris, contributing editor, Light Reading