Rackspace Technology®
(NASDAQ: RXT) (“Rackspace”
or the “Company”), a leading end-to-end hybrid, multicloud, and AI
technology solutions company, through its indirect subsidiary
Rackspace Finance, LLC (the “New Issuer”), today announced offers
to eligible holders in respect of any and all of the 3.50%
First-Priority Senior Secured Notes due 2028 (the “Existing Secured
Notes”) issued by its indirect subsidiary Rackspace Technology
Global, Inc., to (i) (A) exchange certain of those Existing Secured
Notes for new 3.50% FLSO Senior Secured Notes due 2028 (the
“Exchange Notes”) issued by the New Issuer and (B) have purchased
for cancellation certain of those Existing Secured Notes by the New
Issuer for cash (collectively, the “Exchange Offer”), and (ii) fund
(the “Funding Offer” and, together with the Exchange Offer, the
“Offers”) new senior secured first lien first out term loans (the
“New FLFO Term Loans”) of the New Issuer.
The following table summarizes certain terms of
the Exchange Offer, including the consideration eligible holders
will receive in respect of the Existing Secured Notes tendered on
or prior to the Early Participation Time (as defined herein) and
after the Early Participation Time. Eligible holders must validly
tender (and not validly withdraw) all of such holder’s Existing
Secured Notes to participate in the Exchange Offer. Partial tenders
of Existing Secured Notes will not be accepted.
CUSIP Numbers(1) |
|
Early Exchange Consideration for each $1,000 Principal
Amount of Existing Secured Notes Tendered on or Prior to the Early
Participation Time |
|
Late Exchange Consideration for each $1,000 Principal
Amount of Existing Secured Notes Tendered After the Early
Participation Time |
|
With respect to $700 Principal Amount of Existing Secured
Notes |
|
With respect to $300 Principal Amount of Existing Secured
Notes |
|
With respect to $670 Principal Amount of Existing Secured
Notes |
|
With respect to $330 Principal Amount of Existing Secured
Notes |
750098 AB1U7502E AB0 |
|
$700 of Exchange Notes(2) |
|
$0.7875 in cash (the “Early Payment Amount”)(3) |
|
$670 of Exchange Notes(2) |
|
$0.7875 in cash (the “Late Payment Amount”)(3) |
_______________________(1) No representation is
made as to the correctness or accuracy of the CUSIP numbers listed
in this release or printed on the Existing Secured Notes. CUSIP
numbers are provided solely for convenience.
(2) Holders of Existing Secured Notes that are
accepted for exchange pursuant to the Exchange Offer will be
entitled to receive accrued and unpaid interest in cash on the
Existing Secured Notes exchanged for Exchange Notes up to, but
excluding, March 12, 2024. Interest on the Exchange Notes will
accrue from March 12, 2024, with the first interest payment
occurring on August 15, 2024.
(3) No additional payment will be made for
accrued and unpaid interest on Existing Secured Notes purchased and
cancelled for the Early Payment Amount or the Late Payment Amount
(together with the Early Payment Amount, the “Payment Amounts”), as
applicable.
Eligible holders who tender (and do not validly
withdraw) all of their Existing Secured Notes at or prior to 5:00
p.m., New York City time, on March 28, 2024 (such time and date, as
the same may be extended, the “Early Participation Time”), and
their Existing Secured Notes are accepted, will receive the Early
Exchange Consideration described above. The Exchange Offer will
expire at 5:00 p.m., New York City time, on April 11, 2024 (such
time and date, as the same may be extended, the “Expiration Time”).
Eligible holders who tender (and do not validly withdraw) all of
their Existing Secured Notes after the Early Participation Time but
at or prior to the Expiration Time, and their Existing Secured
Notes are accepted, will receive the Late Exchange Consideration
described above.
Eligible holders that validly tender (and do not
validly withdraw) all of such holder’s Existing Secured Notes in
the Exchange Offer at or prior to the Early Participation Time
(“Participating Eligible Holders”) will have the right to purchase
New FLFO Term Loans in an aggregate principal amount equal to
$102.04481 per $1,000 principal amount of Existing Secured Notes
tendered by the Eligible Holder. The purchase price to receive the
New FLFO Term Loans is a cash payment equal to $101.02436 per
$1,000 principal amount of Existing Secured Notes tendered by such
Participating Eligible Holder (which reflects an original issue
discount of 1.0%) (the “Funding Amount”). Participating Eligible
Holders may elect to participate in the Funding Offer by properly
completing and delivering to the Transaction Agent (as defined
herein) certain lender documentation at or prior to 11:59 p.m., New
York City time, on March 28, 2024 (such time and date, as the same
may be extended, the “Funding Election Time”) and, promptly
following the Funding Election Time, the Fronting Lender (as
defined herein) will enter into a trade with each such holder
validly participating in the Funding Offer for the delivery of the
Funding Amount and settlement of the New FLFO Term Loans. The New
FLFO Term Loans are currently held by the Fronting Lender; as a
result, any holder validly participating in the Funding Offer will
receive its New FLFO Term Loans from the Fronting Lender. Eligible
holders may participate in the Exchange Offer without participating
in the Funding Offer or delivering the lender documentation, and
the New Issuer may accept validly tendered (and not validly
withdrawn) Existing Secured Notes from an eligible holder pursuant
to the Exchange Offer that fails to deliver the Funding Amount in
connection with the Funding Offer.
Tenders of Existing Secured Notes pursuant to
the Exchange Offer may be validly withdrawn, together with a
recission of any Funding Amounts delivered pursuant to the Funding
Offer, at any time prior to 5:00 p.m., New York City time, on March
28, 2024 (as the same may be extended) but not thereafter, except
as required by law.
Upon the terms and subject to the conditions of
the Offers, for Existing Secured Notes that are validly tendered at
or prior to the Early Participation Time and not subsequently
validly withdrawn and that are accepted in the Exchange Offer, the
settlement date is expected to occur promptly after the Early
Participation Time (the “Early Settlement Date”). The Early
Settlement Date is expected to occur on April 2, 2024 (the third
business day after the Early Participation Time). For Existing
Secured Notes that have been validly tendered after the Early
Participation Time but at or prior to the Expiration Time and not
subsequently validly withdrawn and that are accepted in the
Exchange Offer, the settlement date is expected to occur promptly
after the Expiration Time (the “Final Settlement Date”). The Final
Settlement Date is expected to occur on April 15, 2024 (the second
business day after the Expiration Time). The Early Settlement Date
or Final Settlement Date may change without notice.
The Exchange Offer is only being made, and the
Exchange Notes are only being offered and issued to holders of
Existing Secured Notes who are (x) reasonably believed to be
“qualified institutional buyers” as defined in Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”) or (y)
not “U.S. persons,” as defined in Rule 902 under the Securities Act
and in compliance with Regulation S under the Securities Act. The
holders of Existing Secured Notes who are eligible to participate
in the Exchange Offer pursuant to at least one of the foregoing
conditions are referred to as “eligible holders.”
The New Issuer is making the Offers only to
eligible holders through, and pursuant to, the terms of a
confidential exchange offering memorandum, dated March 14, 2024
(the “Offering Memorandum”). The complete terms and conditions of
the Offers are set forth in the Offering Memorandum. None of
Rackspace, the New Issuer, the Guarantors (as defined in the
Offering Memorandum), the Transaction Agent, the Fronting Lender or
any other person takes any position or makes any recommendation as
to whether or not eligible holders should participate in the
Offers.
Only eligible holders may receive a copy of the
Offering Memorandum and participate in the Offers. We have retained
Epiq Corporate Restructuring, LLC (the “Transaction Agent” or
“Epiq”) to act as transaction agent for the Offers and Jefferies
Capital Services, LLC to act as the fronting lender for the Funding
Offer (the “Fronting Lender”). Holders of Existing Secured Notes
wishing to certify that they are eligible holders in order to be
eligible to receive a copy of the Offering Memorandum should
complete the eligibility letter and return it to Epiq as directed
therein. Holders of Existing Secured Notes may complete the
eligibility letter on-line at
https://epiqworkflow.com/cases/RackspaceEL or obtain a PDF copy of
the eligibility letter by requesting a copy from
tabulation@epiqglobal.com and referencing “Rackspace” in the
subject line. The eligibility letter can be returned via the online
portal or by emailing a scan of both pages of the fully completed
letter to Epiq at Tabulation@epiqglobal.com and referencing
“Rackspace” in the subject line. Once your response has been
reviewed and cleared by Epiq, you will receive the Offering
Memorandum from Epiq by email.
This press release is for informational purposes
only and does not constitute an offer to sell, or a solicitation of
an offer to buy, any security and does not constitute an offer,
solicitation or sale of any security in any jurisdiction in which
such offer, solicitation or sale would be unlawful. The Exchange
Offer is being made in reliance on the exemption from registration
provided by Section 4(a)(2) of the Securities Act, has not been
registered with the U.S. Securities and Exchange Commission (the
“SEC”) and relies on exemptions under state securities laws.
About Rackspace Technology
Rackspace Technology is a leading
end-to-end hybrid, multicloud, and AI technology solutions company.
We design, build, and operate our customers’ cloud environments
across all major technology platforms, irrespective of technology
stack or deployment model. We partner with our customers at every
stage of their cloud journey, enabling them to modernize
applications, build new products, and adopt innovative
technologies.
Forward-Looking Statements
The Company has made statements in this press
release that are forward-looking and therefore subject to risks and
uncertainties. All statements, other than statements of historical
fact, included in this press release are, or could be,
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 and are made in reliance
on the safe harbor protections provided thereunder. These
forward-looking statements include statements related to the Offers
and the Company’s ability to consummate the Offers within the time
period expected, or at all. Any forward-looking statement made in
this press release speaks only as of the date on which it is made.
The Company undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future developments or otherwise. Forward-looking
statements can be identified by various words such as “expects,”
“intends,” “will,” “anticipates,” “believes,” “confident,”
“continue,” “propose,” “seeks,” “could,” “may,” “should,”
“estimates,” “forecasts,” “might,” “goals,” “objectives,”
“targets,” “planned,” “projects,” and similar expressions. These
forward-looking statements are based on management’s current
beliefs and assumptions and on information currently available to
management. The Company cautions that these statements are subject
to risks and uncertainties, many of which are outside of its
control, and could cause future events or results to be materially
different from those stated or implied in this press release,
including among others, risk factors that are described in the
Company’s Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K, and other filings with the SEC,
including the sections entitled “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” contained therein.
Media Contact
Natalie Silvapublicrelations@rackspace.com
Investor Relations Contact
Sagar Hebbarir@rackspace.com
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