It appears that high-level negotiations for Dell Inc. to acquire Aliso Viejo-based Quest Software Inc. have broken down, although mid-level executives are continuing some discussions, according to published reports.
Dell, the third-largest PC maker, surfaced as the most interested bidder late last month. The Round Rock, Texas-based company has aimed to diversify its product offerings amid an industrywide computer sales slowdown that’s been accelerated in the last year with the growth of tablets and smart phones.
The Business Journal, citing analysts and company watchers, had linked Dell with Quest since 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.
Quest disclosed in a May regulatory filing that more potential bidders had surfaced, but it didn’t disclose any names.
The filing said Quest had received “multiple” proposals during a 60-day “go-shop” period ordered by Quest’s board as part of its unanimous approval of the deal with Insight.
The deal with Insight Ventures includes a relatively small breakup fee of $4.2 million if Quest accepts a different offer during the “go-shop” period, or $6.3 million if the Insight deal is called off at a later date.
Insight Venture Partners has the right to match rival offers.
Quest makes software that manages and improves on other business products from Redmond, Wash.-based Microsoft Corp., IBM Corp. of New York and Redwood Shores-based Oracle Corp., all of which are potential suitors.
Quest is one of Orange County’s biggest software makers, with $857 million in 2011 sales. It has 3,000 workers overall, about 600 here.
Blizzard’s Korean Catch
Blizzard Entertainment Inc. and the South Korean government are headed for a showdown.
The feud heated up late last month when government officials raided Irvine-based Blizzard’s offices in Seoul, Korea, after the company refused to give refunds to frustrated Diablo III gamers who shelled out $60 for the title only to find themselves in a labyrinth of traffic jams, gaming errors and bugs rather than the labyrinth of supernatural encounters and settings the game promised.
A huge response to the new game after its May release led to shutdowns of Blizzard servers, which caused glitches around the world and prompted thousands of angry tweets, Facebook posts and blogs.
The game has sold more than 5 million copies since its May 15 release, breaking numerous PC records along the way.
Blizzard is being investigated for violating South Korea’s law on electronic commerce and commercial contracts, which requires companies to give a refund to a customer within seven days of purchase if asked. Blizzard prohibits refunds for games in use as a matter of policy.
That prompted hundreds of consumers to file complaints with South Korea’s Fair Trade Commission, urging an investigation, according to reports in The Korea Times.
Blizzard responded to complaints by adding servers in Asia to handle more traffic.
Blizzard could be forced to pay off on all refund claims if it’s found at fault. A verdict is expected in the coming weeks.
Blizzard Chief Executive Michael Morhaime called South Korea a key growth market during a recent event at the Center Club in Costa Mesa, so developments bear watching.
Diablo III, which was released a dozen years after its wildly popular predecessor, accounted for more than 16% of user time at PC rooms in South Korea within 24 hours of its release, according to industry tracker Gametrics. That increased to nearly 32% last week.
Bits and Pieces
Newport Beach networking chipmaker Mindspeed Technologies Inc. has hired former technology analyst and consultant Kevin Trosian to head business development and investor relations. Trosian, a 15-year veteran in technology and financial markets, most recently served in a similar role with Power-One Inc., a power conversion and management services company in Camarillo. Prior roles include director at Tower 12 Consulting LLC in Manhattan Beach and senior analyst at then Wedbush Morgan Securities and Banc of America Securities … Cash-strapped Powerwave Technologies Inc. has completed its $12.5 million sale of assets and inventory at its former plant in Suzhou, China, to Shenzhen Tatfook Technology Co., which in turn will provide the company with a long-term manufacturing and supply agreement. The sale is the latest move by the Santa Ana-based company to conserve cash. Powerwave, which makes cellular base station gear for wireless networks, has seen sales plummet the last three quarters amid an equipment spending slowdown by Dallas-based AT&T Inc. and other North American network operators.
