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Dell Wins Long Bidding War for Quest Software

Quest Software Inc. said it has agreed to be acquired by Dell for $2.4 billion, putting to rest months of back and forth bidding between the computer giant and private equity vendors.

The deal, announced early this morning, upends an agreement two weeks ago by Quest, which had accepted an offer by Insight Venture Partners and Vector Capital, in a move intended to take private the provider of tools to manage systems, applications and databases for IT pros and developers.

While the June 20th deal appeared to be the final salvo in the bidding war between Insight Venture and Dell, reports started to surface last week that Dell had sweetened its offer. Quest chairman and CEO Vinny Smith was said to have preferred taking the company private. But in a statement announcing the deal, Smith extolled the benefits of Quest becoming part of Dell.

“Clearly, Dell’s distribution, reach and brand are well recognized in the industry,” Smith said in a statement. “Combine that with Quest’s software expertise and award-winning systems management products and you have a very powerful combination for our customers and partners. With this transaction, Quest’s products and employees become the foundation for Dell’s critical software business.”

Nabbing Quest, one of the largest established and independent suppliers of enterprise software tools, is a coup for John Swainson, whom Dell brought on board in February to build a software business for the company. Ironically Quest, founded in 1987, is a key competitor to CA Technologies, the software giant Swainson headed after running IBM’s software business.

“The addition of Quest will enable Dell to deliver more competitive server, storage,
networking and end user computing solutions and services to customers,” Swainson said in a statement. “Quest’s suite of industry-leading software products, highly talented team members and unique intellectual property will position us well in the largest and
fastest growing areas of the software industry. We intend to build upon the strong momentum Quest brings to Dell.”

The deal, approved by the boards of both companies, is contingent on shareholder approval and customary conditions. It’s slated to close by the end of Dell’s fiscal third quarter, which ends October 31.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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