Low online prices and convenience offered by Amazon.com usually hammer rival retailers. Now it's happening in the world of corporate information-technology services.
Apollo Global Management is buying Rackspace Hosting Inc. for $4.3 billion after the cloud-services company failed to keep pace with cheaper and broader offerings from Amazon and other large technology companies such as Microsoft and Google.
The New York private-equity firm agreed to pay $32 a share in cash for Rackspace, according to a statement Friday.
For Rackspace, the deal marks the end of its public struggle against bigger cloud rivals that offered lower-cost computing power, storage and other information services over the Internet, crimping its ability to compete.
Rackspace is "gaining traction, but they're very small," said Joshua Yatskowitz, a Bloomberg Intelligence analyst. "Bringing it out of the public eye can make that transition a lot easier."