Back in 2000, Rackspace attempted an IPO. Of course, the dot-com implosion derailed those plans.
Well, now the company is back and its IPO prospects look much better.
Rackspace is a giant in the web hosting industry. While the company has a solid infrastructure, it also has an extreme focus on customer service. In fact, the company terms it "Fanatical Support" (which is trademarked).
By the end of 2007, Rackspace had more than 29,000 customers. Actually, over the past five years, revenues have soared from $56.6 million to $362 million,a 59% annual growth rate. The company also posted a $17.8 million profit last year.
What's more, the prospects for the global hosting market look bright. According to Tier1Research, the market is expected to grow 26% per year to $24.4 billion by 2010.
The lead underwriters on the IPO include Goldman, Sachs & Co. (NYSE: GS), Credit Suisse (NYSE: CS) and Merrill Lynch & Co. (NYSE: MER). You can find the prospectus at the SEC website.
Tom Taulli is the author of various books, including The Complete M&A Handbook (www.mergerbook.com) and is also a principal in Averiware, which provides an ERP system to small and midsize businesses.
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