Dell Inc. (Nasdaq: DELL) agreed to buy Quest Software Inc. (Nasdaq: QSFT), a maker of programs to manage corporate computer systems, for $28 a share, ending a bidding contest with Insight Venture Partners.
The acquisition is valued at $2.4 billion, net of cash and debt, the Round Rock, Texas-based company said in a statement today.
The purchase would cap a months-long bidding war for Quest and fits with Dell’s aim to add technology that helps customers outfit data centers for handling storage and cloud computing. Quest’s software lets companies administer databases and servers, as well as back up information and recover lost data.
“Quest Software plays in Dell’s sweet spot,” said Abhey Lamba, an analyst at Mizuho Securities USA Inc., in a research report today. “The combination could help Dell jump start its software business and would be margin accretive.”
Dell’s shares fell 0.9 percent to $12.40 at 9:37 a.m. in New York. Through yesterday, the stock had dropped 14 percent this year. Quest declined 0.2 percent, following a 50 percent gain in 2012 through yesterday.
“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’s software group, in the statement.
Several companies made offers for Quest since it said on March 9 that it had agreed to be bought by Insight Venture Partners, a private equity firm, for about $2 billion, or $23 a share.
Aliso Viejo, California-based Quest said last week that it received an offer for $27.50 a share, or about $2.32 billion, from a company that it didn’t identify. Dell was that company, people familiar with the matter said.
Dell told analysts at a June 13 meeting that it plans to use deals to boost revenue from data-center hardware, software and services by 45 percent to $27.5 billion by fiscal 2016, reducing the company’s reliance on the slow-growing desktop and notebook computer businesses.
The deal is expected to close in Dell’s fiscal third quarter. Quest shareholders must still approve the deal.
The PC maker says the addition of Quest, which helps companies manage databases and provides other corporate IT services, will expand its software offerings.
Quest is based in Aliso Viejo, Calif.
(Bloomberg news and The AP contributed to this report.)