Tags: Quest | Software | Buyer | Offer

Quest Software Has Buyer for $2 Billion but Seeks Sweeter Offer

Friday, 09 March 2012 01:07 PM

Quest Software Inc. has put itself up for sale, saying a private investment firm has agreed to buy the company for nearly $2 billion cash but it is looking for a better deal.

Quest shares soared 23.5 percent to $23.96 at midday Friday, above the $23 per share offered by private investment firm Insight Venture Partners, indicating investors believe the price will rise.

Quest said its board had retained advisers, including the investment bank Morgan Stanley, to solicit and review additional offers for the company during a 60-day "go-shop" period.

Wunderlich Securities Inc. analyst Brian Freed said there is a good chance Quest will end up selling for between $24 and $25 a share.

He said one likely bidder is computer maker Dell Inc., which has used acquisitions to move aggressively into the software business in recent years.

Quest sells backup software and security software that would nicely complement products in Dell's portfolio, Freed said.

Other potential bidders include BMC Software Inc., CA Inc., Microsoft Corp. and Oracle Corp., he said.

If another buyer ends up with Quest, the Aliso Viejo, California-based software maker has agreed to pay Insight a break-up fee of either $4.2 million or $6.3 million, depending on the timing of the deal.

Quest, whose products include software that monitors the flow of data through networks, is led by Chief Executive Vinny Smith, who took over last month after Doug Garn stepped down citing poor health.

Smith, who holds about 34 percent of the outstanding shares in the software maker, said he would vote in favor of the Insight offer unless the deal is terminated.

Last month Quest projected that revenue growth will slow this year to between 8.5 and 10 percent. Revenue rose 11.8 percent last year to $857 million.

© 2019 Thomson/Reuters. All rights reserved.

1Like our page
Friday, 09 March 2012 01:07 PM
Newsmax Media, Inc.

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved