Reuters – Quest Agrees to Higher Offer from Insight

Quest Software agreed to stick with a deal to sell itself to Insight Venture Partners, after the private investment firm and new partner Vector Capital raised their bid to $2.17 billion, above a competing offer made last week, Reuters reported Tuesday. The Insight-Vector cash offer of $25.75 a share tops a $25.50 bid made by a “strategic bidder” that Reuters later identified as Dell Inc.

(Reuters) – Quest Software (QSFT.O) agreed to stick with a deal to sell itself to Insight Venture Partners, after the private investment firm and new partner Vector Capital raised their bid to $2.17 billion, above a competing offer made last week.

 

The Insight-Vector cash offer of $25.75 a share tops a $25.50 bid made by a “strategic bidder” that Reuters later identified as Dell Inc (DELL.O).

 

Under a revised merger agreement, Insight, which first announced a deal with Quest in March, took on private equity partner Vector and will see a four-fold increase in its termination fee to $25 million, should Quest break the deal for a superior offer.

 

Shares of Quest, which hit a year-high of $26.85 on Monday on expectations of a bidding war for the enterprise management software provider, were down 2 percent at $26.03 in aftermarket trade on Tuesday.

 

Dell could not immediately be reached for comment.

 

The deal will be financed through a combination of $187 million each in equity commitment from Insight and Vector, a rollover of at least 84 percent of CEO Vinny Smith’s existing shares and about $1.2 billion in debt financing commitments from J.P. Morgan Chase, RBC Capital Markets and Barclays Capital.

 

Smith owns about 34 percent of Quest’s shares.

 

(Reporting by Chandni Doulatramani and Sayantani Ghosh in Bangalore; Editing by Joyjeet Das, Anthony Kurian)