Dive Brief:

• Rackspace announced Friday that Apollo Global Management will acquire it for $4.3 billion, taking the company private for $32 per share in cash. 
• The Rackspace board of directors unanimously approved the deal, but it must still receive antitrust and stockholder approvals.
• The deal is expected to close in the last quarter of 2016.

Dive Insight:

Rumors of the deal first began circulating in early August. Once the deal is closed, Rackspace will have the chance to grow and innovate in an effort to keep up with its dominant competition while remaining outside of the scrutiny of the public eye. 

Rackspace, an independent web hoster and managed services provider, has struggled in recent years. The company's last earnings report released earlier this month confirmed continued slow growth, with revenue growing just 7% in Q2 2016 over the same period last year. Competitors like Amazon Web Services and Microsoft have seen much bigger growth.

"Although Rackspace now delivers a solid set of basic features, it has not been able to keep up with the pace of innovation of the market leaders," according to Gartner’s Magic Quadrant for Cloud Infrastructure as a Service report released earlier this month.  

"We are excited that this transaction will provide Rackspace with more flexibility to manage the business for long-term growth and enhance our product offerings," Graham Weston, co-founder and chairman of the board of Rackspace said in the press release.

Apollo has been investing in the technology sector more frequently, including the acquisition of Presidio Inc. last year. Private equity purchases of tech companies have been on the rise lately overall.