Rackspace Technology Inc. is exploring a potential sale of some or all of the business.
The San Antonio-based firm initially formed as a hosting company. For many years Rackspace billed itself as a cloud provider to rival the likes of AWS before pivoting to managed services, consulting, and private/multicloud offerings.
However, just two years after going public for a second time, the company is now “evaluating strategic alternatives” for the business.
In a press release announcing its latest quarterly results, Rackspace CEO Kevin Jones said: “Rackspace Technology recently completed an in-depth strategic review of our company. As we completed this strategic review, and also based on inbound interest for one of our businesses, we concluded that a sum of the parts valuation of Rackspace Technology could be greater than our current enterprise value.
“Accordingly, we are evaluating strategic alternatives and options. We will provide further information as appropriate in light of developments.”
In its earnings call, the company said it would share details on its future strategy, operating organization, and long-term financial model at an Analyst Day to be held in September. Jones added that “everything is on the table” in terms of options going forward.
Rackspace says it operates colocation services from more than 40 data centers globally, many from its acquisition of DataPipe in 2017.
The company has had a sometimes turbulent history amid competition from the major public cloud players. After forming in 1998, the company first went public on the New York Stock Exchange in 2008. It was taken private in 2016 after Apollo Global Management acquired the company for $4.3 billion. It went public again, this time on the Nasdaq, in 2020.
In its most recent results, the company posted revenue of $776 million, but a net loss of $39 million. Rackspace has posted a net loss every quarter since it went public a second time.
Last year the company announced plans to lay off around 10 percent of workforce – around 700 staff – as part of a restructuring plan, and would use the money saved to reinvest and expand its product offerings in “fast-growing” areas of the business.
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