Dell acquires Quest Software for £1.5 billion

Written on:July 2, 2012
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Displaying the 'IT' factor...Dell acquires Quest Software

After weeks of continued speculation, Dell has finally announced that it has acquired IT management firm Quest Software for $28 (£18) per share, totalling about $2.4 billion (£1.5 billion).

Dell has entered in the cash deal in an effort to expand its software business and decrease its dependence on the declining personal computer market.

The bidding war began when Quest had agreed to go private after receiving a bid of $23 (£14.6) a share from Insight Venture Partners, the private equity firm that had helped Quest go public several years back.

Dell intruded during that period to entice with a superior offer for the benefit of Quest shareholders. Dell offered $25.50 (£16.2) per share for Quest, topping Insight’s initial offer in March of $23 (£14.6) per share.

A $2.15 billion (£1.36 billion) deal was rumoured in June before another bid of just over $2.3 billion (£1.46 billion) was apparently made at the end of the month. Now both parties have settled on $2.4 billion (£1.5 billion) and the deal will be completed during Dell’s third fiscal quarter.

Quest will become part of Dell’s recently established Software Group, headed by former CA CEO John Swainson. “The addition of Quest will enable Dell to deliver more competitive server, storage, networking and end user computing solutions and services to customers”, he said.

The move is the latest from Dell in an effort to move away from low-margin PC making and towards more lucrative software and services. It moved into the services space back in 2009 with the acquisition of Perot Systems and since then has acquired companies in the security, cloud integration and virtualisation space.

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