UPDATE, 08/05/16: Sources tell Fortune that Apollo is the interested private equity buyer.
News that Rackspace could be sold to a private equity firm this week from the Wall Street Journal has pushed its shares up 16.91 percent to $31.03 in after hours trading on Thursday. The San Antonio-based cloud company is in advanced talks with one or more private equity firms that places the value of the company around $4 billion, according to a report by Barron’s blog
If the headline sounds familiar, it’s because almost exactly two years ago, reports indicated that Rackspace was exploring the option of taking the company private. It hired Morgan Stanley to help it explore its M&A options at the time, but nothing ever came of it.
Over the past two years under a new CEO, Rackspace has expanded its portfolio to include support and managed services for some of the most popular public clouds, including AWS. This strategy has helped it appeal to new customers and extend its reach beyond web hosting.
According to a report by Market Realist earlier this week, “Rackspace’s increased customer signing from AWS is an encouraging sign, considering Amazon rules the cloud space with a 31 percent market share. Moreover, its deal with Microsoft’s Azure is also beneficial for the company, as Microsoft is rapidly making its presence felt in the cloud space.”