Rackspace Hosting may be sold.
The San Antonio-based company hired Morgan Stanley to evaluate potential partnerships and acquisitions.
“In recent months, Rackspace has been approached by multiple parties who have expressed interest in exploring a strategic relationship with Rackspace, ranging from partnership to acquisition,” according to a statement filed with the Securities and Exchange Commission last week.
“Our board decided to hire Morgan Stanley to evaluate the inbound strategic proposals and to explore other alternatives which could advance Rackspace’s long-term strategy,” Rackspace wrote. “No decision has been made and there can be no assurance that the Board’s review process will result in any partnership or transaction being entered into or consummated.”
Rackspace, which provides web hosting and open cloud services, reported it did not intend to comment on the situation until its board approves a specific partnership or transaction. The company has faced increasing competition from giants Google and Amazon, which provide cloud hosting services.
In February, Lanham Napier, 43, retired as Rackspace’s chief executive officer. He had led the company since 2000 from a small startup to a large publicly traded company with more than 5,000 employees worldwide and more than $1.5 billion in revenue.
A year earlier, Lew Moorman, Rackspace’s president, left the company because of health issues with a family member.
Since February, Graham Weston, Rackspace’s chairman and co-founder, has served as its CEO.
Rackspace, founded in 1998, is the largest technology company in San Antonio with more than 3,000 employees occupying the old Windsor Park Mall in Northeast San Antonio. It also has an office in Austin and has international offices in London and Hong Kong.
Rackspace’s stock, traded under the symbol RAX on the New York Stock Exchange, soared on the news of the possible sale last week. Rackspace’s stock closed at $36.12 on Friday, up nearly 18 percent. The company’s stock traded as low as $26 and as high as $54 in the last 52 weeks. The stock traded as high as $81 per share in January of 2013, according to Forbes.
Tag: hosting
At the age of five, Patrick Condon, co-founder of Rackspace, remembers stocking the shelves at his parents video rental store.
It was his first memory of seeing how business works.
He also walked dogs, mowed lawns and threw papers.
In college, he would buy computer parts cheap and then sell them on America Online and message boards for a profit.
At Trinity University in San Antonio, he met Richard Yoo, another co-founder of Rackspace. He met Dirk Elmendorf a little later. They all went to Trinity, but not at the same time. They met up after college.
They created a business that worked. They rented server space to customers around the world. Their first order came in from German. They bought $3,000 worth of servers on a maxed out credit card. The customer paid them $1,000 a month. They would be profitable in three months, Condon said. But it didn’t quite work that way. The next day, they got another order. They had to find money to buy more servers.
Edwin Grubbs, one of the earliest Rackspace employees, gave plasma everyday to buy ramen noodles to keep the crew fed, Condon said. He didn’t have enough plasma, though, to buy servers, he said. So they needed outside investment.
The three co-founders got investment capital from Graham Weston and Morris Miller and together they created what came to be known as Rackspace, now one of the country’s largest cloud computing hosting companies.
Back in February, Susan Lahey did this profile of WP Engine, the wordpress hosting site founded by Jason Cohen.
The startup is growing by leaps and bounds. And today they posted a video showing their team spirit and showcasing why Austin is a great place to work. The entire staff ran a 5K around Town Lake, including the wet guy, which you’ll have to watch the video to see what he did. I love all the geeks mapping out and caching their routes with their laptops.
San Austin Productions, a business that clearly sees the opportunity in the combined Austin and San Antonio technology community, shot the video.
Three months ago, a group of entrepreneurs moved into Geekdom in downtown San Antonio.
Since then, the inaugural TechStars Cloud participants have been toiling away and working to create blockbuster cloud businesses that will change the world.
Some have iterated, pivoted and overhauled their operations countless times. Names have changed. Teams have mixed it up.
But in the end, 11 companies stand ready to present today at the Charline McCombs Empire Theatre in downtown San Antonio.
The event kicks off at 9:30 a.m. and ends around 2 p.m. But a reception later in the evening at the Weston Centre will celebrate the accomplishments of this group of entrepreneurs and their leaders, Jason Seats, founder of SliceHost and Nicole Glaros, managing director of TechStars in Boulder, Colo. Seats and Glaros ran the TechStars Cloud program.
The TechStars Cloud focused on cloud computing and cloud infrastructure. Its mentors included Pat Condon, founder of Rackspace, Jeff Lawson, founder and CEO of Twilio, Brad Feld, head of the Foundry Group, George Kardis with SoftLayer, Rajat Bhargava, founder and CEO of StillSecure and dozens more.
All of the companies received $18,000 and access to more. Today, some of the companies will ask for investment capital, while others are fully funded. The audience will include venture capitalists and angel investors.
Rackspace Hosting, which started out as a small venture in San Antonio in 1998 has since developed into a global corporation with nearly 4,000 employees.
I’ve covered the company since its early days. So it’s really thrilling to watch it launch a San Francisco office near the heart of Silicon Valley. Graham Weston, chairman of Rackspace, is in San Francisco today to celebrate the official opening. Here’s the list of today’s activities and I’ve posted a video from Rackspace that provides insight into what Rackspace does.