Cork software firm receives third buyout offer in a year

Quest Software, the Cork-based company which agreed to be bought by a group led by Insight Venture Partners, says it has received a higher offer of $27.50 (€22) a share in cash, the third buyout increase announced this year.

The bid from an unidentified strategic suitor is superior to a $25.75-a-share offer Quest accepted from Insight last week. Dell had previously offered to acquire Quest, according to a person familiar with the matter. Quest employs 220 people at its office in Mahon, Co Cork.

In March, Quest said it had agreed to be acquired by Insight for $23 a share, and two months later said it received several other proposals that it anticipated would lead to a superior offer.

Chief executive Vincent Smith prefers a sale to Insight over Dell because it would allow him to keep running the company, said the person, who asked not to be named because the negotiations are private.

“The strategic bidder is likely Dell,” said Aaron Schwartz, an analyst for Jefferies & Co in New York.

“It would give them a relatively decent foundation for an enterprise software business. They’ve acquired storage companies, they’ve acquired networking companies, but they have not built out a software business relative to their peers.”

Quest, Dell, and Insight all declined to comment on the matter yesterday.

Quest’s software helps businesses to administer databases and servers, as well as back up information and recover lost data.

Insight, a New York-based private equity firm, specialises in software and internet businesses.

Dell, the world’s third-largest PC maker, told analysts earlier this month that it planned to use deals to boost revenue from data-centre hardware, software, and services by 45% to $27.5bn by fiscal 2016, reducing the company’s reliance on the slow-growing desktop and notebook computer business.

The last time Dell engaged in a public takeover fight was in 2010, when it lost the storage company 3Par to Hewlett-Packard, which bought it for $2.35bn after an 18-day bidding contest that tripled the company’s market value.