Insight Said to Top $25.50-a-Share Buyout Offer for Quest

Quest Software Inc. (QSFT), a maker of tools to help companies manage computer systems, accepted a sweetened $25.75-a-share bid from Insight Venture Partners and agreed to the addition of Vector Capital to the buyout group.

Insight’s new cash offer of about $2.17 billion topped a per-share bid of $25.50 that Quest received last week. That offer came from personal-computer maker Dell Inc. (DELL), a person familiar with the matter said today. The deal’s termination fee was increased to $25 million from $6.3 million, the Aliso Viejo, California-based software maker said in a statement today.

Quest said on March 9 it 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 Officer 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.

David Frink, a spokesman for Dell, declined to comment.

Quest has advanced 43 percent this year to $26.52, giving it a market value of $2.24 billion, after the competing bids emerged. Quest’s software helps businesses administer databases and servers, as well as back up information and recover lost data. New York-based Insight specializes in software and Internet businesses.

To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Jeffrey McCracken at jmccracken3@bloomberg.net

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