Jersey City hosting and colocation firm is being purchased by rival

Rackspace is buying Jersey City-based Datapipe, one of its biggest competitors, to expand its managed services, hosting and colocation.

The deal, whose financial terms weren’t disclosed, is expected to be completed by the fourth quarter.
Texas-based Rackspace’s biggest purchase in its history will allow it to manage multiple clouds at scale.

“Our customers are looking for help as they spread their applications across public and private clouds, managed hosting and colocation, depending on the blend of performance, agility, control, security and cost efficiency they’re seeking,” Rackspace CEO Joe Eazor said. “With the acquisition of Datapipe, we’re very pleased to expand the multi-cloud managed services we provide our customers, while also opening doors to new opportunities across the globe.”

Datapipe has experience serving high-profile public-sector customers, including the U.S. departments of Defense, Energy and Treasury, along with providing professional services, software and tooling that will help better serve enterprise customers.

The deal will also expand Rackspace into data centers and offices in key markets, including the West Coast of the U.S., Brazil, mainland China and Russia.

Rackspace brings experience in Microsoft, VMware and OpenStack private clouds, managed Google Cloud Platform and managed services for enterprise applications.

Datapipe was founded in 2000, and employs 825 people in 29 data centers in nine countries.

“We are very proud of the business we have built and the innovations and successful customer outcomes we have been recognized for, and the future of Datapipe will be even brighter in combination with Rackspace,” said Datapipe founder and CEO Robb Allen. “Customers need guidance using public cloud infrastructure from Alibaba Cloud, Amazon Web Services, Google Cloud Platform and Microsoft Azure. They also need help navigating the use of private clouds, managed hosting and colocation solutions, often in combination, as they move critical applications out of their corporate data centers.”

Citigroup is acting as sole financial adviser to Rackspace. Barclays and DH Capital are acting as financial advisers in the transaction to Datapipe. DLA Piper LLP is acting as legal adviser to Datapipe.