Dell, which is looking to become an enterprise IT solutions provider, is in a bidding war with Insight Venture Partners for Quest Software.
Dell reportedly has upped its offer for
enterprise software maker Quest Software to about $2.32 billion, escalating a
bidding war with investment firm Insight Venture Partners.
Quest officials disclosed June 25 that an
unnamed bidder had increased its offer to $27.50 per share, though anonymous
sources told
Reuters and
BloombergBusinessweek
that the bidder was Dell. The worlds third-largest PC maker has been named in
several reports over the past few weeks as being one of the tech vendors more
interested in buying Quest, and less than two weeks ago reportedly
offered
$2.15 billion for the company.
Dell is bidding against Insight Venture
Partners, an investment group that in March offered $2 billion to buy the
25-year-old software maker. Quest executives accepted the bid, but were given a
period of time to shop around the offer to see if they could find a better deal
somewhere else.
Quest officials have said that they have
received interest from several companies, and that the latest offer is superior
to any others. Insight Venture Partners can now match the latest bid or adjust
its own offer.
Neither Dell nor Quest spokespeople have
commented on the reported bidding war.
Dell is no stranger to bidding wars. In 2010,
the company and Hewlett-Packard engaged in a high-profile 10-day
bidding
contest for storage vendor 3Par, a competition that HP eventually won with
a bid of about $2.35 billion. Dell CEO Michael Dell said afterward that he
believed HP vastly overpaid for the storage company, and that he was glad his
company had pulled out of the bidding war.
Dell has since bought other storage
technology vendors, including Compellent and Ocarina Networks.
Dells interest in buying 3Par and the other
storage companies came from the companys initiative to grow beyond its roots
as a PC and server maker and become an enterprise IT solutions provider,
enabling it to sell higher-margin products. That same desire is driving similar
acquisition efforts in other areas, including networking and software.
Quest, which has been a partner of Dells
since 2004, sells software that is designed to help businesses manage database,
server and user workspaces, protect and back up data, and monitor performance.
It would fall in line with Dells strategy, which is to sell software that
complements what its doing with IT solutions, rather than become a one-off
software vendor.
During a
meeting
with analysts earlier this month, Michael Dell and other executives said
the company still has significant growing to do in a number of areas, including
storage, networking and software, and that acquisitions would be a key tool to
accomplish that.
"We have a modest software business, and
that's an area where we can grow rapidly," Dell told the analysts, adding
that the company has "some nice acquisitions, which are off to a good
start."