Quest To Be Taken Private In $2 Billion Deal


Quest Software is being taken private in a $2 billion deal with Insight Venture Partners, an agreement that was disclosed Friday.

Once the acquisition is complete, the IT management software developer will continue to be led by current Chairman and CEO Vinny Smith and the existing senior management team, according to the company.

"As a private company, we will have increased flexibility to drive innovation across our product lines and execute our long-term strategy," Smith said in a statement. "We expect this strategic partnership with Insight, with whom we have worked for many years, will ensure the company has a secure foundation and a commitment to investment in the company's long-term growth. This move to a private company also will create exciting career opportunities for our employees, while retaining our commitment to continuing to provide excellent service to our customers."

Related: Quest Uses Partner Conference To Highlight Data Protection Opportunities

Quests has a broad range of IT management products, including the Toad line of database administration tools, Quest One identity and access management applications, Foglight application monitoring software, and the Recovery Manager line of system recovery tools.

While the majority of Quest's sales are direct, VARs and distributors account for a growing share of the company's sales. In a letter to channel partners Michael Sotnick, vice president of worldwide channels and alliances, reiterated the company's commitment to its partners.

"From an operations perspective, our business will run as usual," Sotnick wrote. "Quest will continue in much the same way as before, including our unwavering commitment to Quest Partner Circle. You are essential to our go-to-market strategy and we will continue to support your efforts across the entire Quest solutions portfolio."

Insight Venture Partners will pay $23 per share in cash for Quest's outstanding shares, a 19 percent premium above the March 8 closing price. The deal has been approved by Quest's board of directors and is subject to shareholder approval.

Smith, who owns approximately 34 percent of the company's shares, will roll those shares over into the newly created private company. Quest and Insight expect the transaction to be completed in the third quarter of this year.

For fiscal 2011 ended Dec. 31, 2011, Quest reported net income of $52.1 million on total revenue of $857.4 million.

The Aliso Viejo, Calif.-based company said it will maintain its headquarters in California.