Rackspace Announces Agreement to Acquire Datapipe

Singapore – September 12, 2017 – Rackspace® today announced that it signed an agreement to acquire
Datapipe, one of the world’s leading providers of managed services across
public and private clouds, managed hosting and colocation. This acquisition,
the largest in Rackspace history, brings important new capabilities to
Rackspace and will enable the company to better serve customers of all kinds,
globally and at scale.

According to industry surveys, the vast majority of companies
operate across three or more clouds today, and will do so for years to come.
Customers have been asking Rackspace to rapidly expand its abilities in
managing multiple clouds at scale, and with the acquisition of Datapipe,
Rackspace will be able to meet this growing demand.

Among the new capabilities that Datapipe will bring to Rackspace
are:

•                    Experience
serving high-profile public sector customers, including the U.S. Departments of
Defense, Energy, and Treasury, as well as the U.K. Cabinet Office, Ministry of
Justice, and Department of Transport

•                    Professional
services, software and tooling that will help better serve enterprise customers

•                    Data
centers and offices in key markets where Rackspace today has little or no
presence, including the West Coast of the U.S., Brazil, mainland China, and
Russia

•                    Traditional
colocation services across four continents, to reduce cost and risk for
customers moving applications out of their corporate data centers

•                    Managed
services on the Alibaba Cloud (the largest in China)

By the same token, Rackspace brings new capabilities to Datapipe
customers, including:

•                    Deep
experience in Microsoft, VMware, and OpenStack private clouds, including new
service offerings for Azure Stack and VMware Cloud on AWS

•                    Managed
Google Cloud Platform

•                    Managed
services for enterprise applications, including those in the Oracle and SAP
ecosystems, and those used in digital marketing and ecommerce

“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,” said Joe Eazor, CEO of Rackspace. “With the
acquisition of Datapipe, we’re very pleased to expand the multi-cloud managed serviceswe
provide our customers, while also opening doors to new opportunities across the
globe.”

Founded in 2000, Datapipe is a pioneer in managed public cloud
services. It is a growing and profitable business, based in Jersey City, N.J.,
with 825 employees and 29 data centers in nine countries. Datapipe serves the
complex needs of many large enterprises, including Johnson & Johnson,
McDonalds and Rubbermaid.

“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 Robb Allen, founder and CEO of Datapipe.
“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. The combination of complementary capabilities and
resources from both of our companies will create the world’s leading provider
of multi-cloud managed services.”

Rackspace and Datapipe are remarkably similar. Both companies have
been positioned as leaders in the Gartner Magic Quadrant assessments of
providers of managed cloud services, and in industry rankings by Forrester and
other leading analyst firms. Both companies are known for their technical
expertise and managed services across multiple clouds, exceptional customer
service, profitable growth, and engaged workplace cultures. Rackspace intends
to build on the industry leadership the two companies have established in
reliability and support, to create a new level of end-to-end customer
experience.

Pending regulatory approvals, Rackspace’s acquisition of Datapipe
is expected to close in Q4 2017. Rackspace will develop a comprehensive
integration plan and will take great care to maintain and enhance the
exceptional customer outcomes that both companies are known for. Rackspace
looks forward to welcoming the talented employees from Datapipe.

Both companies are privately held, with Rackspace owned by
affiliates of certain funds of Apollo Global Management, LLC and certain
co-investors. The majority owner of Datapipe, Abry Partners, will receive
equity in Rackspace. Brian St. Jean, Partner at Abry, described this
transaction as “a measure of our confidence in the bright future of Rackspace
when combined with Datapipe.” No additional terms or details of the transaction
will be publicly disclosed.

Citigroup is acting as sole
financial advisor to Rackspace in the transaction and has committed to provide
incremental Senior Secured Credit Facilities, which will be used in part to
refinance Datapipe’s existing indebtedness and pay related fees and expenses.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to
Rackspace.

Barclays and DH Capital are acting as financial advisors in the
transaction to Datapipe. DLA Piper LLP is acting as legal advisor to Datapipe.

Rackspace, the leading
multi-cloud managed services company, helps businesses tap the power of cloud
computing without the complexity and cost of managing it all on their own.
Rackspace engineers deliver specialized expertise, easy-to-use tools, and
Fanatical Support® for leading technologies including AWS, Google, Microsoft,
OpenStack, Oracle, SAP and VMware. The company serves customers in 150
countries, including more than half of the FORTUNE 100. Rackspace was named a
leader in the 2017 Gartner Magic Quadrant for Public Cloud Infrastructure
Managed Service Providers, Worldwide and has been honored by Fortune, Forbes,
and others as one of the best companies to work for. Learn more at www.rackspace.com.

A next generation MSP,
Datapipe is recognized as the pioneer of managed services for public cloud
platforms. Datapipe has unique expertise in architecting, migrating, managing
and securing public cloud, private cloud, hybrid IT and traditional IT. The world’s
most trusted brands partner with Datapipe to optimize mission-critical and
day-to-day enterprise IT operations, enabling them to transform, innovate, and
scale. Backed by a global team of experienced professionals and world-class
interconnected data centers, Datapipe provides comprehensive cloud, compliance,
security, governance, automation and DevOps solutions. Gartner named Datapipe a
leader in the 2017 Gartner Magic Quadrant for Public Cloud Infrastructure
Managed Service Providers, Worldwide.