Dell Close to Deal for Quest Software

By ANUPREETA DAS And BEN WORTHEN

Dell Inc. is close to striking a deal to buy Quest Software Inc. after trumping a private-equity group, and an announcement could come as early as Monday, people familiar with the matter said.

The final price for the deal couldn't be learned, but Dell last week had offered $27.50 a share, or about $2.3 billion for Quest, whose software helps businesses manage their databases, the people said.

Dell's latest offer came after a months-long bidding war with a buyout group led by Insight Venture Partners. Quest's chief executive, Vinny Smith, and buyout firm Vector Capital, which joined the effort later, were part of the group, which had initially agreed to buy Quest in March for $23 a share, and later upped its offer to $25.75 a share, or $2.17 billion.

However, the buyout group struggled to put together financing to match or top Dell's higher offer, despite last-minute efforts by Mr. Smith, according to a person familiar with the matter.

Quest, of Aliso Viejo, Calif., had deemed the $27.50 a share offer "superior" last week without identifying the bidder. Under the terms of its agreement with Insight, the buyout firms had the right to match or beat the "superior" offer.

News of the potential deal was earlier reported by Bloomberg.

On Friday, Quest shares rose six cents to $27.81 in 4 p.m. Nasdaq Stock Market trading.

For Dell, Quest would be the latest in a string of deals as it looks to expand beyond its core business selling PCs. In particular Dell has focused on buying software makers, like Quest, with higher-margin businesses than computers.

Dell earlier this year formed a unit dedicated to selling software and hired John Swainson, the former head of CA Inc., to run it. Dell has already announced several acquisitions this year, including security firm Sonicwall Inc. and "cloud computing" specialist Wyse Technology Inc.

A version of this article appeared July 2, 2012, on page B3 in the U.S. edition of The Wall Street Journal, with the headline: Dell Close To Buying Quest Software.