Rackspace Buys Boston Area’s TriCore in Largest-Ever Acquisition

San Antonio—Rackspace has acquired a Norwell, MA-based company called TriCore Solutions that the cloud computing giant says is its largest acquisition ever, both financially and by the number of employees. The news comes less than a year after Rackspace itself was bought for $4.3 billion by Apollo Global Management, a New York-based private equity firm that took Rackspace private as part of the transaction.

While Rackspace didn’t disclose terms of the deal, it appears to be at least in the eight figures. When Rackspace was still a publicly traded company, it revealed in a regulatory filing that it paid $30 million for an acquisition in 2010. The only business Rackspace said in the filing it bought that year was Cloudkick, a startup founded by Alex Polvi that made Web applications for cloud server management. (Polvi now has a new company, CoreOS.)

With TriCore, which is located about 26 miles south of Boston, Rackspace is gaining a company with similar operations to its own. TriCore provides IT consulting, management, and support services to large businesses, offering to update or replace anything from a company’s databases, enterprise applications for business operations, or cloud computing infrastructure.

Rackspace is targeting TriCore specifically for its work with businesses to manage enterprise applications—anything from customer relationship management to human resource software. TriCore already has “partners” in companies such as Oracle, SAP, Microsoft, Amazon Web Services, and HP, providing support to businesses that use software made by those companies.

Meanwhile, Rackspace is focused on providing hosting services and related support for businesses, with an increased focused in recent years on offering management and customer service to businesses who use public clouds, like those provided by Amazon and Microsoft.

Customers of Rackspace had been requesting it provide more managed application services, which led Rackspace to the TriCore acquisition, according to a press release. TriCore has 275 enterprise-class customers, including Arby’s Restaurant Group and Kelly-Moore Paints, Rackspace says.

In terms of TriCore being Rackspace’s largest acquisition by number of personnel: TriCore has 513 employees worldwide, and more than two-thirds of them are based in India. The company has 158 U.S.-based employees, most of whom work from its offices in Norwell. Ninety percent of TriCore’s employees work in customer service, according to the press release.

The acquisition appears as if it won’t have an immediate impact on San Antonio—the company’s employees are staying in the locations they currently work, Rackspace said.

The news follows an announcement yesterday that Joe Eazor, who was most recently the CEO of EarthLink, is taking over as Rackspace’s new chief executive in June. Rackspace President Jeff Cotten has been filling in as an interim CEO since Taylor Rhodes left the role earlier this month for Chicago-based software company SMS Assist.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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