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Potential Rackspace Sale: Presidio Owner Apollo Buying Cloud MSP?

Apollo Global Management, a private equity firm, is bidding to buy Rackspace for roughly $3.5 billion, according to Reuters. Rumors about the negotiations surfaced on August 4. If such a deal happens, Rackspace and managed IT services giant Presidio would wind up with the same private equity owner.

Apollo acquired Presidio — a major Cisco, VMware and EMC partner — in December 2014 (the deal was finalized in February 2015). Presidio has since made¬†additional acquisitions on the cloud services, managed services and software development fronts.

ChannelE2E is not suggesting that Apollo would hatch a plan to merge Rackspace and Presidio — although it’s a rather interesting long-shot possibility. In recent months, Presidio has been exploring a potential IPO, according to reports.

Apollo’s successful track record with Presidio could be highly valuable for Rackspace, which has struggled to pivot in the cloud and managed services market over the past two years or so. As Amazon Web Services and Microsoft Azure became the de facto public cloud leaders, Rackspace deemphasized its own public cloud and instead introduced managed services for third-party clouds and any customer data center.

Still, Rackspace’s growth rate hasn’t impressed Wall Street over the past two years or so and takeover rumors have surfaced pretty regularly. Rackspace is expected to announce its latest quarterly results on Monday, Aug. 8.

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