Quest Deal Is Done; Private Equity Wins

Quest Software is officially going private and will remain an independent software vendor. The company announced yesterday that it had accepted a sweetened buyout offer by Insight Venture Partners and its collaborating investor Vector Capital.

The deal, approved by the Quest board of directors, brings to an end three months of dealing and speculation over the fate of the software vendor that specializes in Windows and database management, cloud computing and managed services tools.

In March, Quest announced it was being taken private by Insight in a deal initially valued at $2 billion. Quest and Insight agreed to a 60-day competitive bidding period in which other suitors were welcomed to bid on the company.

Several companies were said to have taken an interest, including Microsoft, IBM, CA Technologies, BMC Software and Oracle. The most credible alternative buyer was Dell, which is said to have offered $2.15 billion for Quest.

Dell reportedly broke off talks in May, only to return last week with a better offer. That prompted Insight to bring Vector into the deal and sweeten the offer to the final price of $2.2 billion.

The impact of the ownership change remains unclear. Since Quest will remain an independent company under private equity ownership, few changes to operations, go-to-market and channel relations are expected.

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