Quest Software Takes Offer from Dell (DELL, QSFT)

Computer maker Dell Inc. (NASDAQ: DELL) today announced that it has signed a definitive agreement to acquire Quest Software Inc. (NASDAQ: QSFT) for $28/share in an all-cash deal valued at $2.4 billion. The deal is expected to close in Dell’s third fiscal quarter, ending in October.

Venture firm Insight Venture Partners started the bidding for Quest back in March, with an offer of $23/share. In early June, Quest disclosed an offer of $25.50 from an unnamed party that was later topped by Insight and partner Vector Capital with an offer of $25.75. An offer of $27.50/share was made last week by an unnamed buyer. At the time, Dell was thought to be the bidder.

This is the biggest deal so far in Dell’s recent buying spree. Let’s review: IT security firm SonicWall in March; hardware/software maker Wyse Technology in April; and Clerity Solutions also in April. No purchase prices were disclosed for any of these deals, but Quest is undoubtedly the largest. Dell is trying to put together a hardware/software combination that will gain some traction in the market and boost the company’s top line. If and how that effort pays off remains to be seen.

Dell’s shares are down about -0.9% in the first few minutes of trading this morning, at $12.40 in a 52-week range of $11.68-$18.36.

Paul Ausick