Aliso Viejo-based Quest Software Inc. has accepted a $2.17 billion takeover offer by New York-based Insight Ventures Partners and Vector Capital in San Francisco.
The bid topped a $2.15 billion offer by an unnamed strategic bidder thought to be Round Rock, Texas-based computer maker Dell Inc. The Insight-Vector offer, subject to shareholder and regulatory reviews, was approved by a special committee formed by Quest’s board to review alternative bids.
The transaction would be financed with $364 million in cash, with Insight and Vector each accounting for half the total. There will be a rollover of at least 84% of shares held by Quest Chairman and Chief Executive Vinny Smith—who owns about a third of the company—and about $1.2 billion in debt financing from J.P. Morgan Chase Bank N.A., RBC Capital Markets and Barclays Capital.
The Insight-Vector bid, announced June 19, was valued at $25.75 per share. That beat an offer announced June 15 by the unnamed bidder that was valued at $25.50. Insight had started things off with a $2 billion offer carrying the right to match subsequent offers.
Quest makes software that helps manage and improve other business products from various companies, including Washington-based Microsoft Corp., IBM Corp. of New York, and Redwood Shores-based Oracle Corp. All had been considered prospective suitors for Quest amid a budding bidding war.
Quest is one of Orange County’s biggest software makers with $857 million sales in 2011. It has 3,000 workers overall, about 600 here.
