Cloud Computing: Dell Gets Quest for $2.36 Billion

Grazed from Sys Con Media. Author: Maureen O’Gara.

Dell has won the bidding war for Quest Software agreeing to pay $28 a share, a 50 cent improvement on its last bid.

That brings the price to $2.36 billion, which is what JPMorgan claimed the company was worth weeks ago.

Insight Venture Partners, which offered $23 a share back in March, had to bring in Vector Capital, another private equity firm, to offer a financed cash bid of $25.75 a share. Dell retorted with $27.50 or about $2.32 billion. That’s where things were last Monday with the ball in Insight’s court…

The equity boys had Quest CEO Vinny Smith, who owns 34% of the company, on their side. He reportedly preferred their deal because he could keep running the systems management company but they couldn’t put the financing together according to the Wall Street Journal.

Dell was never publicly identified as the rival bidder until now but Reuters blew its cover weeks ago.

The deal should close by the end of October.

"The addition of Quest will enable Dell to deliver more competitive server, storage, networking and end-user computing solutions and services to customers," John Swainson, the president of Dell’s Software Group said in a press release. "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."

Dell hired Swainson, the ex-CEO of CA and a long-time IBMer, to improve its position in software since PCs, already a low margin business, are in decline. It’s recently bought Wyse and Sonicwall.

Insight and Vector should get a $25 million termination fee.