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Dell Acquisition of Quest Software Confirmed

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Monday, global information technology company Dell (NASDAQ: DELL) announced that it will acquire Quest Software (NASDAQ: QSFT), a designer and developer of software products, for $2.4 billion.

The announcement ends weeks of speculation and a bidding war between Dell and rival Insight Venture Partners.

Dell President John Swainson said in a statement, "The addition of Quest will enable Dell to deliver more competitive server, storage, networking and end user computing solutions and services to customers. Quest's suite of industry-leading software products, highly-talented team members and unique intellectual property will position us well in the largest and fastest growing areas of the software industry."

According to Dell, the acquisition is valued at $2.4 billion, net of Quest's cash and debt.

Benzinga reported on June 20 that Quest had accepted a bid from Insight Venture Partners valued at $25.75 per share.

At that time, Quest issued a statement saying that, "In making its recommendation, the Special Committee consulted with its independent financial advisors and outside legal counsel. In connection with the Board's approval of the Amended Agreement with Insight and Vector for a purchase price of $25.75 per share, and upon the recommendation of the Special Committee, the Board also determined that the previously announced proposal for $25.50 per share submitted by a strategic bidder no longer constituted a “Superior Proposal” as defined in the Insight Merger Agreement."

However, that bid was followed on June 25 with a strategic bid, believed to have been from Dell. Benzinga reported that Quest had "received a strategic bid of $2.32 billion. The new bid beat a previous offer by private investment firm Insight Venture Partners of $2.17 billion."

Vincent Smith, Quest's CEO, said in a Monday statement that, "Clearly, Dell's distribution, reach and brand are well recognized in the industry. With this transaction, Quest's products and employees become the foundation for Dell's critical software business.”

Quest might help Dell achieve its aim of expanding into software, in particular helping customers with storage equipment and cloud computing.

On Monday morning, Dell traded at about $12.40, down roughly 0.7 percent. Quest Software traded at about $27.80, down roughly 0.1 percent.

Follow me @BCallwood.

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