Dell Confirms Buying Quest Software for $2.4 Billion

Dell has decided to buy Quest Software Inc for $2.4 billion, a company that creates management tools for IT people at corporate level. The decision is taken to foster its software business and weaken its dependence on the waning PC market.

The deal is likely to be finalized in the coming weeks. Last month Quest announced that it had received an offer from a company but did not disclose its name. However, Dell emerged as the potential buyer of Quest.

Dell said that it will pay $28 per share, 17 percent above the closing price before Quest initially revealed Dell’s offer.

Dell is hopeful that its corporate software and services business will achieve an average growth rate of up to 10 percent in 2016.

“The addition of Quest will enable Dell to deliver more competitive server, storage, networking and end-user computing solutions and services to customers,” said John Swainson, president of Dell Software Group.

Dell has a very good track record in terms of bidding wars, but it didn’t come out of the box until the deal was confirmed. Back in 2010, the company was involved in an atrocious battle with Hewlett-Packard over cloud storage company 3par. However, HP finally won the battle for around double Dell’s original offer.

Quest Software has been able to collect $857 million in global revenue based on fiscal year 2011, which eventually results at gross margins of 86% and operating margins of 11%. The company is equipped with 1,500 potential sales force and 1,300 competent software developers. However, the workforce will later join Dell software group after the deal is confirmed.

Quest is located at Aliso Viejo, CA and has more than 100,000 clients across the globe, including 87% of the Fortune 500. The company is spread in 23 countries, having 3,850 employees in 60 offices.