NEW YORK (TheStreet) -- Shares of Rackspace Hosting (RAX) were gaining at the start of trading on Friday as the San Antonio, TX-based managed cloud company will be taken private in a $4.3 billion acquisition by private equity firm Apollo Global Management.

Under the terms of the deal, Rackspace shareholders will receive $32 per share in cash, representing a 38% premium to the stock's closing price on August 3 when the Wall Street Journal first reported that the companies were nearing a deal.

The value of the transaction includes the assumption of $43 million of net cash as well. 

"Our board, with the assistance of independent advisors, determined that this transaction, upon closing, will deliver immediate, significant and certain cash value to our stockholders," Graham Weston, co-founder and chairman of the board of Rackspace, said in a statement.

The acquisition is expected to close in the 2016 fourth quarter. 

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Rackspace's strengths such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth are countered by the fact that the stock has had a generally disappointing performance in the past year.

You can view the full analysis from the report here: RAX

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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