By
Temitope Olatunji
April 24th, 2024
This is not the first time Rackspace goes public. Back in August 2008, the company had its public debut. With an upcoming IPO, Rackspace hopes to grow and cover its debts.
On Friday, cloud services company Rackspace Technology Inc filed for an initial public offering (IPO). In a statement with the U.S. Securities and Exchange Commission (SEC), Rackspace did not specify the size of the offering. But according to some sources, a public offering could value the company at over $10 billion, including debt.
According to the company’s S-1 filing, Rackspace hopes to raise at least $100 million in its IPO. Rackspace will list on the Nasdaq exchange under the ticker symbol “RXT.” Goldman Sachs, Citigroup, JPMorgan, Evercore, RBC Capital Markets, and other banks will underwrite the company’s offering.
This is not the first time Rackspace goes public. Back in August 2008, Rackspace had its public debut. In November 2016, the company was acquired by New York-based private equity company Apollo Global Management LLC. The sum of the deal made up $4.3 billion at that time.
About Rackspace before Its IPO
Rackspace positions itself as a multi-cloud technology services pioneer. The company delivers the innovative capabilities of the cloud to help customers build new revenue streams, increase efficiency, and create incredible experiences. With over 120,000 clients across 120 companies, Rackspace has a proven record of advising customers based on their business challenges, designing solutions that scale, building and managing those solutions, and optimizing returns into the future. Headquartered in San Antonio, Texas, Rackspace has many data centers operating in the USA, UK, Australia, and Hong Kong.
In addition, Rackspace has over 1000 AWS technical certifications, more than 1500 Microsoft certifications, including MCITPs, MCSAs, MCSEs, and MCTSs, as well as about 350 Salesforce Certifications.
Last month, Rackspace changed its official name, becoming “Rackspace Technology”. The change was supposed to reflect the end-to-end technology solutions the company started providing. They include cloud optimization, security, cloud-native enablement, and data modernization.
Speaking of Rackspace’s financial performance, it’s worth saying that the company has numerous debts. For the quarter that ended on March 31, Rackspace reported $125.2 million cash flow. However, its debts are much higher. $3.99 billion debt includes a $2.82 billion term loan facility as well as $1.12 billion in senior notes that cost the firm an 8.625% coupon, among other debts.
Further, in Q1 2020, Rackspace generated $21.5 million in operating profit from its $652.7 million in revenue from the quarter. As for its net loss, it totaled $48.2 million. It may seem that Rackspace’s business is going a bit groggy, but it is not so. In comparison with the Q1 2019 result of $606.9 million, the company has seen a 7.6% growth in Q1 2020. With an upcoming IPO, Rackspace hopes to see further growth and cover its debts.