Quest Software said it has entered into definitive agreements with affiliates of Insight Venture Partners to become a private company. In the deal, stockholders would receive $23 per share in cash, valuing the company at approximately $2.0 billion. Upon closing, Quest will be a privately held company and will continue to be led by chairman and CEO Vinny Smith and the existing senior management team.
Established in 1987, Quest provides IT management solutions to more than 100,000 global customers. Its products include solutions for database management, data protection, identity and access management, monitoring, user workspace management, and Windows management.
"As a private company, we will have increased flexibility to drive innovation across our product lines and execute our long-term strategy. We expect this strategic partnership with Insight, with whom we have worked for many years, will ensure the Company has a secure foundation and a commitment to investment in the company's long-term growth," said Smith in a statement released by the company. "This move to a private company also will create exciting career opportunities for our employees, while retaining our commitment to continuing to provide excellent service to our customers."
The shares of Smith will be "rolled over" into the surviving privately owned entity. The purchase price represents a 19% premium to the closing price on March 8, 2012.
The proposed merger with an affiliate of Insight was negotiated and unanimously recommended to the board by a special committee of the company's board of directors, which comprised three independent and disinterested directors.
In addition, the special committee negotiated a 60-day period (the "go-shop" period) during which the special committee - with the assistance of its independent financial and legal advisors - will solicit, receive, evaluate, and potentially enter into negotiations with parties that offer alternative proposals. The period commences on the date of the agreement. The agreement also calls for the company to pay a break-up fee to Insight of $4.2 million for termination of the merger agreement during the go-shop period in connection with a superior proposal. After the end of the go-shop period, the break-up fee for superior proposals is $6.3 million.
Subject to closing conditions and the receipt of no superior proposal, the transaction is expected to close in the third quarter of 2012.
More details are available at www.quest.com.