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Quest Software: Dell’s Shopping Spree Continues

By David Benoit

Dell has made it official. It has reached a deal to buy Quest Software at an increased $28 a share, the latest move by a particularly acquisitive computer maker this year.

The price would be a 21% premium to the deal Quest had reached with private-equity buyer Insight Venture Partners in March.

That offer led to a bidding war between Insight and Dell, though Dell didn’t reveal itself until this morning. The Wall Street Journal reported earlier Monday that Dell and Quest were near a deal, after Dell had trumped the last Insight offer with a $27.50 bid last week.

Dell sweetened the bid to $28 to close the deal, valuing Quest at $2.4 billion. In beating out Insight and Vector Capital, which Insight pared with to increase its bid, Dell also had to battle Quest Chairman and CEO Vinny Smith, who had sided with the private-equity buyers.

Smith was quoted in today’s release saying the deal with Dell created a “very powerful combination” and noting that “Quest products and employees become the foundation for Dell’s critical software business.”

Dell has been on a software buying binge this year after forming a group dedicated to business software, an area in which Quest was well regarded. The company’s M&A and strategy head, Dave Johnson, has already been called “the busiest man in tech” by an analyst in April. That superlative came as Dell reached agreements with three acquisitions in three days in early April.

n total, Dell has purchased six companies this year, after buying eight last year, according to Capital IQ. Besides Quest, none of Dell’s deals came with a price tags officially attached, though Deal Journal had earlier reported Dell paid $1.2 billion for security company SonicWall.

ISI Group points out the Quest deal will come with more integration work than Dell’s other acquisitions this year. With its first five deals, Dell added 1,850 new employees , or about 2% of Dell’s current staff. Quest alone would add 3,850 more.

Quest Software: Dell’s Shopping Spree Continues

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