Quest Software Draws More OffersWednesday, May 9, 2012
More potential bidders for Quest Software Inc. have surfaced, the Aliso Viejo-based company disclosed on Wednesday.
Company-watchers had expected additional suitors to emerge after the business-software maker announced in early March it was slated to go private in a $2 billion deal led by New York private equity firm Insight Venture Partners.
The roster of interested companies linked to Quest includes a slew of big technology players including Dell Inc. in Round Rock, Texas; Redmond, Wash.-based Microsoft Corp.; and IBM Corp. in New York.
Longer shot candidates include Houston-based BMC Software Inc., Palo Alto-based Hewlett-Packard Co., and CA Technologies Inc., a Long Island, N.Y.-based IT-management software maker.
Quest said in a regulatory filing it had received “multiple” proposals during its 60-day “go-shop” period under a directive by Quest’s board, which had unanimously approved the deal with Insight.
A special committee formed to review alternative bids determined “multiple proposals are reasonably expected to lead to a superior proposal,” the company said.
The committee has yet to make a final determination, Quest said.
The Insight Venture deal calls for Quest to pay a relatively modest breakup fee of up to $6.3 million if the deal isn’t completed by certain deadlines.
By comparison, Irvine-based drive maker Western Digital Corp. faced a $250 million termination fee if it didn’t finalize its $4.8 billion buy of Hitachi Global Storage Systems Inc. in San Jose in March.
Quest makes software that manages and improves on other business products from Microsoft, IBM and Redwood Shores-based Oracle Corp., another potential suitor.
The company is one of Orange County’s biggest software makers with $857 million in 2011 sales. It has 3,000 workers overall, about 600 here.
Investors heralded the news of additional bidders.
Quest shares rose almost 10% to reach a 52-week high in afternoon trading to a market value of about $2.1 billion.