Apollo Global takes Rackspace private in $4.3B deal

SAN FRANCISCO — Private equity firm Apollo Global has agreed to buy Rackspace Hosting in a $4.3 billion deal that will take the cloud-services company private.

The cash transaction, announced Friday, continues a recent mergers-and-acquisitions spurt that have redefined segments of the tech industry. It is expected to be completed in the fourth quarter.

The cash infusion is considered crucial to Rackspace, a relatively small player in the cloud industry that has struggled to compete with large rivals Amazon and Microsoft. Rackspace is in the midst of a business strategy transition, in which it is helping corporations move their IT operations to the computing servers of Microsoft and Amazon.

"As a private company, Rackspace will be best positioned to capitalize on our early leadership of the fast-growing managed cloud services industry,” Graham Weston, co-founder of Rackspace, said in a statement.

The New York-based Apollo has taken several companies private this year, including home-security company ADT in a $12 billion deal.

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