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Apollo Global is buying Rackspace for $4.3B

businessinsider.com

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Re: Apollo Global is buying Rackspace for $4.3B

#111

Post by shostack »

kolbe wrote: post #44
cpach wrote: post #34

Earlier quoted context omitted.

What do you mean?

I think this is a smash-and-grab deal. They'll write down RAX's assets, then sell them while calling the difference between their sales price and the written down value "profits." They'll dish themselves out a dividend from the sales, maybe issue some more debt to buy additional infrastructure, then IPO it knowing that blackrock and fidelity and pension funds only look at earnings when they value companies (which the…

Surely analysts at the companies you mentioned are wise to this and factor in the likelihood of this happening, no?

Re: Apollo Global is buying Rackspace for $4.3B

#112

Post by jordanlev »

jszymborski wrote: post #55

I'm praying that Mailgun doesn't get affected by this, they're absolutely awesome for the small shops like me (and easy to integrate).

Just went through this process with the Mandrill debacle earlier this year. I've found SendGrid to be on par with Mailgun (with a less wonky admin dashboard too). Both have comparable 10k~12k free sends per month.

If you're using the SMTP gateway instead of direct API integration (which is the only way I'd do it these days, after dealing with a bunch of sites that were tied to Mandrill's API), then there's not really much that needs to happen for the switch.

Re: Apollo Global is buying Rackspace for $4.3B

#113

Post by roel_v »

srunni wrote: post #59
whateverdudes wrote: post #38

Earlier quoted context omitted.

Off topic, but can you tell me more about the issue with being taken over by a private equity firm? I work for a 10k employee company who will be taken off stock exchange and sold to a Chinese equity firm.

If you want to know more about PE firms and LBOs, check out the book Barbarians at the Gate: The Fall of RJR Nabisco : https://www.amazon.com/gp/aw/d/0061655554

It's a fun read but not very technical, or rather, not technical at all. It's a story, I didn't learn anything about finance or business strategy from it.

Re: Apollo Global is buying Rackspace for $4.3B

#114

Post by srunni »

roel_v wrote: post #113
srunni wrote: post #59

Earlier quoted context omitted.

If you want to know more about PE firms and LBOs, check out the book Barbarians at the Gate: The Fall of RJR Nabisco : https://www.amazon.com/gp/aw/d/0061655554

It's a fun read but not very technical, or rather, not technical at all. It's a story, I didn't learn anything about finance or business strategy from it.

Right, it's good for a weekend read. I wouldn't say it's completely devoid of educational value. It's interesting to see how Johnson manages his board relationships, as well as the details of the bidding process and how difficult it can be to form partnerships.

The late 80s were definitely a different time, though - the amount of money needed for the RJR LBO is much more easily accessible to people in similar positions in 2016. As of June 30th, KKR's AUM is $131B, while Blackstone is at $356B.

Another good read on PE is King of Capital (https://www.amazon.com/dp/0307886026).

If you're interested in learning the technical details of corporate finance, you're probably best off starting with something like the Coursera class Introduction to Corporate Finance (https://www.coursera.org/learn/wharton-finance), and then reading the textbooks referenced by the course for a more in-depth understanding.

Re: Apollo Global is buying Rackspace for $4.3B

#115

Post by Sir_Cmpwn »

jordanlev wrote: post #112
jszymborski wrote: post #55

I'm praying that Mailgun doesn't get affected by this, they're absolutely awesome for the small shops like me (and easy to integrate).

Just went through this process with the Mandrill debacle earlier this year. I've found SendGrid to be on par with Mailgun (with a less wonky admin dashboard too). Both have comparable 10k~12k free sends per month. If you're using the SMTP gateway instead of direct API integration (which is the only way I'd do it these days, after dealing with a bunch of sites that were tied to Mandrill's API), then there's not really…

I just switched to running my software's email from my personal mail server when Mandrill died. Setting up your own mail server is a pain in the ass but it has paid off 100x imo.

Re: Apollo Global is buying Rackspace for $4.3B

#116

Post by wcarss »

illumin8 wrote: post #22
wcarss wrote: post #14

Earlier quoted context omitted.

The Dell/EMC purchase may have been just to buy and then sell VMware, which EMC owned. If I recall correctly, EMC and VMware had both lost meaningful value after uniting and it was commonly held that VMWare was worth much more, so Dell is likely try to rip those two apart, pump VMware back up, sell it at a profit on the whole EMC purchase, and keep the EMC assets as gravy. One sign of this occurring is the aggressive…

I agree with your speculation; it seems likely, however, I don't understand why laying off staff at VMware would help make the company stronger - is it just supposed to make the balance sheet look good in the short term? Short-term results oriented layoffs like this decimated HP under Carly Fiorina, and I don't have a good long-term outlook on VMware, if Dell decides to take a similar approach.

My understanding is that it is purely to improve the short term outlook on paper.

I agree that it does not seem wise for the actual health of the entity.

Re: Apollo Global is buying Rackspace for $4.3B

#117

Post by zymhan »

AndyNemmity wrote: post #98
zymhan wrote: post #86

Earlier quoted context omitted.

Isn't this deal similar to Dell going private? I can certainly imagine how it might not end well for a company that gets taken private, but I also think that trying to innovate and grow in such a competitive environment would be even harder if you have to worry about shareholders breathing down your neck.

Dell going private with it's original owner is very different than a portfolio company taking a company private.

Ah, yes, that's a good point.

Re: Apollo Global is buying Rackspace for $4.3B

#118

Post by tinix »

evanscottgray wrote: post #31
colinramsay wrote: post #11

Over the past six months I've been battling with poor service from Rackspace, with hosts mysteriously dying and their agents are trying to upsell me (load balancers for a single server, for example). We're migrating away but this doesn't surprise me.

what was the use case when they wanted you to have a load balancer for a single server..?

I don't know about the poster above, but commonly load balancers can be used to do SSL termination, which can significantly improve application performance.

Re: Apollo Global is buying Rackspace for $4.3B

#119

Post by unethical_ban »

colinramsay wrote: post #64
colinramsay wrote: post #11

Over the past six months I've been battling with poor service from Rackspace, with hosts mysteriously dying and their agents are trying to upsell me (load balancers for a single server, for example). We're migrating away but this doesn't surprise me.

I want add that their UI is awful too. Errors and slowness and their imaging system is constantly failing. We're testing out vultr for cost, speed and simplicity.

Vultr seems to take longer than digital ocean to get to a prompt from creation. But if you're not rapidly spinning up dozens a day it may not matter.

I also feel like they don't communicate maintenance windows or outages as well as they should.

But I still use them because they have a Dallas location and DO doesn't.

Re: Apollo Global is buying Rackspace for $4.3B

#120

Post by wastedhours »

jszymborski wrote: post #55

I'm praying that Mailgun doesn't get affected by this, they're absolutely awesome for the small shops like me (and easy to integrate).

Yep - building out a solution with Mailgun at the moment, and has all the features I need and want. Probably comparatively simple to use Amazon SES, Postmark or Mandrill, but MG's been solid in development.
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