Rackspace to Acquire Datapipe

In what is described as the largest acquisition in its history, Rackspace is buying Datapipe, a provider of managed services across public and private clouds, managed hosting and colocation.

Pending regulatory approvals, Rackspace’s acquisition of Datapipe is expected to close in Q4 2017. Terms of the deal were not disclosed.

Founded in 2000, Datapipe is based in Jersey City, N.J., with 825 employees and 29 data centers in nine countries, and customers such as Johnson & Johnson, McDonalds, and Rubbermaid.

According to Rackspace, industry research shows that the vast majority of companies operate across three or more clouds today, and will do so for years to come, creating a need for it to rapidly expand its abilities in managing multiple clouds at scale.

Among the new capabilities that Datapipe will bring to Rackspace are experience in 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; and the addition of 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.

Datapipe also brings to Rackspace traditional colocation services across four continents, to reduce cost and risk for customers moving applications out of their corporate data centers; and managed services on the Alibaba Cloud (the largest in China).

“Our customers are looking for help as they spread their applications across public and private clouds, managed hosting, and colocation, depending on the blend of performance, agility, control, security, and cost-efficiency they’re seeking,” said Joe Eazor, CEO of Rackspace. “With the acquisition of Datapipe, we’re very pleased to expand the multi-cloud managed services we provide our customers, while also opening doors to new opportunities across the globe.”

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. 

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