Dell buys Quest software for $2.4bn

TIN BOX FLOGGER Dell has bought IT management software firm Quest for $2.4bn.

Dell's pursuit of Quest has been rumbling on for some time, with the attractive software vendor having a number of suitors. In the end Dell paid $28 a share for Quest, valuing the firm at $2.4bn.

Dell has been trying to move away from just selling low-margin tin boxes, making a big play in servers and more recently, software. Quest's core business is in IT management but it also has the Sonicwall and Secureworks security brands, which will likely continue to be offerred by Dell.

John Swainson, president of Dell's Software Group said, "The addition of Quest will enable Dell to deliver more competitive server, storage, networking and end user computing solutions and services to customers. Quest's suite of industry-leading software products, highly-talented team members and unique intellectual property will position us well in the largest and fastest growing areas of the software industry. We intend to build upon the strong momentum Quest brings to Dell."

While Dell's cheque for $2.4bn might sound like a lot, on the face of the deal the numbers look good, with Quest reporting $857m in 2011 revenues and very high gross profit margins. While Quest reported that most of its expenses go to sales and marketing, Dell can use existing sales channels to try to increase the profitability of the firm.

Dell said it expects to close the deal in its third financial quarter, subject to Quest shareholder approval. µ