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Dell Inc. (DELL) agreed to buy Quest Software Inc., a maker of programs to manage corporate computer systems, for about $2.4 billion, ending a bidding contest with Insight Venture Partners.
The acquisition for $28 a share in cash is expected to close in Dell’s fiscal third quarter, the Round Rock, Texas- based company said in a joint statement today with Quest.
The purchase caps a months-long bidding war for Quest and fits with Dell’s aim to add technology that helps customers outfit data centers for handling storage and cloud computing. Quest’s software lets companies administer databases and servers, as well as back up information and recover lost data.
“Quest Software plays in Dell’s sweet spot,” said Abhey Lamba, an analyst at Mizuho Securities USA Inc., in a research report today. “The combination could help Dell jump start its software business.”
Dell’s shares fell 1 percent to $12.39 at the close in New York, and the stock has dropped 15 percent this year. Quest was little changed at $27.82, gaining 50 percent in 2012.
Several companies made offers for Quest since it said on March 9 that it had agreed to be bought by Insight Venture Partners, a private equity firm, for about $2 billion, or $23 a share.
Aliso Viejo, California-based Quest said last week that it received an offer for $27.50 a share, or about $2.32 billion, from a company that it didn’t identify. Dell was that company, people familiar with the matter said.
Dell told analysts at a June 13 meeting that it plans to use deals to boost revenue from data-center hardware, software and services by 45 percent to $27.5 billion by fiscal 2016, reducing the company’s reliance on the slow-growing desktop and notebook computer businesses.
“This becomes the cornerstone asset for Dell’s software business,” said John Swainson, president of Dell’s software group, on a conference call today.
Quest had cash and marketable securities of $263.2 million as of March 31, and debt of $104.1 million, according to data compiled by Bloomberg.
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