Rackspace announced an agreement to acquire Datapipe on September 11, 2017, saying the deal would expand its global managed-services capabilities. The transaction later closed: Rackspace announced completion on November 16, 2017, while a subsequent SEC filing lists November 15 as the acquisition date. That filing, rather than the original announcement, reports approximately $1.039 billion in total consideration.
What Rackspace announced—and when
On September 11, 2017, Rackspace said it had signed an agreement to acquire Datapipe. The company expected the transaction to close in the fourth quarter, subject to regulatory approvals, and described it as the largest acquisition in its history. Those were Rackspace’s statements at announcement, not independent assessments of the deal’s scale or strategic value. Rackspace’s September 11 announcement said it would disclose no additional transaction terms at that time.
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The acquisition was completed. Rackspace announced completion on November 16, 2017; its later SEC filing identifies November 15, 2017, as the acquisition date. These are distinct dates: the filing’s acquisition date is one day before the public completion announcement. Rackspace’s completion announcement and its 2020 SEC-filed S-1/A document the milestones.
How much did Rackspace pay for Datapipe?
The September 2017 announcement did not disclose the price. Rackspace later reported the consideration in its 2020 SEC-filed S-1/A: approximately $1.039 billion in total, comprising cash, common stock and contingent consideration. The filing valued the contingent consideration at the time of acquisition.
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| Component | Approximate amount | What the filing says |
|---|---|---|
| Cash | $764 million | Cash consideration; the filing says the cash amount was financed in part with an incremental $800 million in term-loan borrowings. |
| Common stock | $174 million | Consideration paid in Rackspace common stock. |
| Contingent consideration | $101 million | Valued at the time of acquisition. |
| Total consideration | Approximately $1.039 billion | Reported in Rackspace’s 2020 SEC-filed S-1/A, not in the September 2017 announcement. |
The $800 million borrowing is not an additional price component to add to the total: the filing describes it as financing used in part for the cash amount, among other purposes. The acquisition figures are later-filed amounts, not terms disclosed when Rackspace first announced the agreement.
Why Rackspace said it wanted Datapipe
Rackspace’s stated rationale was that organizations were placing applications across public and private clouds, managed hosting and colocation, and needed help choosing environments to meet different requirements. CEO Joe Eazor said customers were seeking a mix of “performance, agility, control, security, and cost-efficiency.” Rackspace positioned its managed services as a way to help customers operate across those environments; the announcement provided no comparative performance measurements or independent evaluation of the combined portfolio.
Rackspace described Datapipe’s contributions as:
- Managed services spanning public and private clouds, alongside managed hosting and colocation.
- Professional services and software and tooling for enterprise customers.
- Experience serving high-profile public-sector customers.
- Data centers and offices in markets where Rackspace said it had little or no presence, including colocation on four continents.
- Managed services on Alibaba Cloud.
Rackspace also said it could bring Datapipe customers expertise and managed services involving Microsoft, VMware, OpenStack, Google Cloud Platform, Oracle and SAP ecosystems, among other capabilities. These are capabilities Rackspace described in connection with the 2017 transaction; the announcements do not establish which specific offerings remain available today.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How Rackspace described the combined business
At completion, Rackspace said the acquisition expanded its managed hosting and private-cloud capabilities and its managed public-cloud services across AWS, Microsoft Azure, Google Cloud Platform and Alibaba Cloud. It called the combined company a leading provider of multi-cloud managed services. That ranking language is Rackspace’s characterization, not an independently verified market ranking.
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The deal is therefore best understood as a strategic expansion of an enterprise services business—not as a consumer cloud product purchase. The public announcements explain the buyer’s intended rationale and the capabilities it said the acquisition added; they do not show measured results such as customer savings, service performance improvements or market share gains.
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