IT and Business Insights for SMB Solution Providers

Rackspace Announces Agreement to Acquire Datapipe

Pending acquisition will expand Rackspace's multi cloud-managed services and open doors to global opportunities. By ChannelPro

Rackspace today announced that it has signed an agreement to acquire Datapipe, one of the world’s leading providers of managed services across public and private clouds, managed hosting, and colocation. This acquisition, the largest in Rackspace history, brings important new capabilities to Rackspace and is intended to position the company to serve customers globally and at scale.

Among the new capabilities that Datapipe will bring to Rackspace are:

  • Experience serving high-profile public sector customers, including the U.S. Departments of Defense, Energy, and Treasury, as well as the U.K. Cabinet Office, Ministry of Justice, and Department of Transport
  • Professional services, software, and tooling that will help better serve enterprise customers
  • Data centers and offices in key markets where Rackspace today has little or no presence, including the West Coast of the U.S., Brazil, mainland China, and Russia
  • Traditional colocation services across four continents, to reduce cost and risk for customers moving applications out of their corporate data centers
  • Managed services on the Alibaba Cloud (the largest in China)

By the same token, Rackspace brings new capabilities to Datapipe customers, including:

  • Deep experience in Microsoft, VMware, and OpenStack private clouds, including new service offerings for Azure Stack and VMware Cloud on AWS
  • Managed Google Cloud Platform
  • Managed services for enterprise applications, including those in the Oracle and SAP ecosystems, and those used in digital marketing and ecommerce

Founded in 2000, Datapipe is a pioneer in managed public cloud services. It is a growing and profitable business, based in Jersey City, N.J., with 825 employees and 29 data centers in nine countries. Datapipe serves the complex needs of many large enterprises, including Johnson & Johnson, McDonalds, and Rubbermaid.

“We are very proud of the business we have built and the innovations and successful customer outcomes we have been recognized for, and the future of Datapipe will be even brighter in combination with Rackspace,” said Robb Allen, founder, and CEO of Datapipe. “Customers need guidance using public cloud infrastructure from Alibaba Cloud, Amazon Web Services, Google Cloud Platform, and Microsoft Azure. They also need help navigating the use of private clouds, managed hosting and colocation solutions, often in combination, as they move critical applications out of their corporate data centers. The combination of complementary capabilities and resources from both of our companies will create the world’s leading provider of multi-cloud managed services.”

Pending regulatory approvals, Rackspace’s acquisition of Datapipe is expected to close in Q4 2017. Rackspace will develop a comprehensive integration plan and will take great care to maintain and enhance the exceptional customer outcomes that both companies are known for. Rackspace looks forward to welcoming the talented employees from Datapipe.

Both companies are privately held, with Rackspace owned by affiliates of certain funds of Apollo Global Management, LLC and certain co-investors. The majority owner of Datapipe, Abry Partners, will receive equity in Rackspace. No additional terms or details of the transaction will be publicly disclosed. 

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’s existing indebtedness and pay related fees and expenses. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Rackspace.

Barclays and DH Capital are acting as financial advisors in the transaction to Datapipe. DLA Piper LLP is acting as legal advisor to Datapipe.

ChannelPro SMB Magazine
SUBSCRIBE FREE!

Get an edge on the competition

With each issue packed full of powerful news, reviews, analysis and advice targeting IT channel professionals, ChannelPro-SMB will help you cultivate your SMB customers and run your business more profitably.