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Rackspace sucks up Datapipe, swallows 29 data centres

Financial details undisclosed, but it's big, ya hear, says Rackspace

Private equity-backed Rackspace is planning to use some of its owner’s cash to hoover up managed services, hosting and colo outfit Datapipe.

The buy, which is expected to close in fourth quarter 2017 and is subject to pending regulatory approvals, will swell Rackspace’s data centre footprint by 29 server farms and give it fresh reach into Russia, Brazil, the US West Coast and China, the firms said.

In addition to its own racks for rent, Datapipe resells public clouds from the likes of AWS, Azure and Alibaba. The firm also developed a VMware-powered hosted private cloud and a platform for government customers and other service providers.

Remaining relevant in a competitive multi-cloud world is important for both companies – neither has the scale on their own to compete against the giants, so a tie-up would seem to make some sense and further purchases would appear likely.

Datapipe was founded in 1998 by Robb Allen, and has raised more than $300m since its inception. Customers include fast food joint McDonald’s and pharma/ consumer brand Johnson & Johnson. The firm acquired Adapt, a London-based managed service provider, a year ago.

Rackspace entertained the idea of a buyout in 2014 but pulled out of talks. The company was actually taken private in August 2016 when Apollo Global Management bought the business for $4.3bn.

The combined entity will have sales of circa $2.4bn and a workforce of some 6,700 people.

The terms of the sale were not disclosed, but Rackspace said it was the biggest purchase it has made to date. ®

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