Quest Software Acquired: IT Management, Security Software Deal Valuation
Financial terms of this deal were not disclosed, though some financial metrics surfaced in The Wall Street Journal. Indeed, the deal values Quest Software at $5.4 billion including debt, and 10.9 times Quest's EBITDA (earnings before interest, taxes, depreciation and amortization) for the last 12 months, according to a Wall Street Journal report.Francisco Partners and Elliott Management have owned Quest Software since acquiring the business from Dell Technologies in 2016. That move helped Dell to strengthen its balance sheet for the massive EMC buyout that year.Under Francisco Partners' ownership, Quest Software in 2016 also broke apart from SonicWall, a firewall provider that has evolved into a unified security company focused on MSPs and MSSPs.Quest Software Business Evolution
Quest underwent a business transformation by 2020, naming Patrick Nichols as CEO and hiring multiple CXOs as his lieutenants. Quest also shifted from client-server software to cloud-based solutions. The journey involved organic R&D (research and development) and acquisitions. Key IT management and security software purchases included:- January 2021: Erwin, a data modeling, data governance and business process modeling software company.
- 2020: Quadrotech and Binary Tree for Microsoft 365 and Office 365 cloud migration software tools.
- Microsoft Active Directory management and security;
- data governance;
- data operations;
- data protection;
- unified identity and security;
- migration and consolidation; and
- unified endpoint management.
Quest Software Acquired Again: Executive Perspectives
In a prepared statement about the deal, Nichols said:“IT teams worldwide rely on Quest to help them solve critical challenges that enable business growth and address crucial strategic initiatives. Quest has evolved to become a market leader in identity-centric cybersecurity, data intelligence, and IT operations management and I want to thank Francisco Partners for helping Quest realize this vision. Our new partnership with Clearlake will accelerate Quest’s momentum as a leader and innovator as we increase our investment pace in our core product roadmaps, cloud/SaaS offerings, and global presence. We will continue to expand our customer base as computing environments and related management, modernization, and security challenges, become more complex.”
“We have long admired Quest as a leading identity-centric cybersecurity, data intelligence, and IT operations management software platform and the Company’s software solutions that help secure enterprise IT environments. We are excited to partner with Patrick and Carolyn McCarthy, Quest’s CFO, to utilize Clearlake’s O.P.S. framework to help the Company strengthen its strategic growth plans including best practices to accelerate cloud/SaaS adoption and support its buy-and-build strategy.”
