Thursday, November 23, 2017

Rackspace targets $3bn ERP market with largest acquisition in its history

Investment to drive support for mission-critical enterprise applications used to manage functions such as manufacturing, logistics and financial operations.

Rackspace has entered into an agreement to acquire management of enterprise applications company TriCore Solutions, in what has become Rackspace’s largest acquisition to date, the company said.

TriCore’s portfolio includes Enterprise Resource Planning (ERP) solutions from Oracle and SAP.

TriCore delivers its services on infrastructure in any location the customer chooses: the customer’s data centre, a TriCore data centre, a colocation facility, or a data centre run by a hyperscale cloud provider such as Amazon Web Services or Microsoft Azure.

Cloud services provider Rackspace, which less than 48 hours ago nominated a new CEO, expects the transaction to close in June this year. Financial details have not been disclosed.

According to industry analysts, companies spend approximately $3bn per year on ERP, business intelligence and analytics, and database managed services. The hosted segments of these markets are expected to grow double digits a year going forward.

Jeff Cotten, president and interim CEO of Rackspace, said: “TriCore’s services are among the best in that space and are highly complementary to ours.

“They will help enable us to deliver more of the services that our existing customers need, while opening the door to new opportunities across the globe.”

TriCore CEO Mark Clayman, said: “TriCore and Rackspace are a great fit in terms of our cultures and we offer complementary services.

“We have worked for 18 years to develop our delivery expertise, create value for customers, and win their trust and loyalty. We are extremely excited to join the Rackspace team and leverage its brand and industry reach to continue to expand our offerings.”

Rackspace’s adviser for this transaction is BMO Capital Markets Corp.