July 10, 2020 / 4:27 PM / a month ago

Apollo-owned cloud company Rackspace files for U.S. IPO

(Reuters) - Cloud services firm Rackspace Technology Inc, owned by private equity firm Apollo Global Management, filed for a U.S. initial public offering on Friday.

Rackspace did not specify the size of the offering in the paperwork filed to the U.S. Securities and Exchange Commission.

Reuters reported in April that Apollo was preparing to take Rackspace public in an IPO that could value the company at more than $10 billion, including debt, citing people familiar with the matter.

Rackspace leases server space and helps corporations store and access data in the cloud. The San Antonio-based company had been exploring an IPO for the last two years, but its weak organic growth and large debt, owed to its $4.3 billion leveraged buyout by Apollo in 2016 and subsequent acquisitions, had stopped it from pursuing it.

Rackspace is among the tech firms that have benefited as companies have allowed employees to work remotely, with the pandemic driving up demand for cloud computing services.

The company intends to list its shares on the Nasdaq under the symbol “RXT”.

Goldman Sachs, Citigroup, and J.P. Morgan are the lead underwriters for the IPO.

Reporting by Bharath Manjesh in Bengaluru; Editing by Vinay Dwivedi

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