Dell Inc has announced it will buy Quest Software for $2.4 billion in an all cash purchase, or $28 per share. The private investment firm Insight Ventures had originally offered $23 per share in March and a bidding war in June developed after Dell offered $25.50 per share for Quest Software. Insight Ventures later offered $25.75 per share for Quest, but was not enough against Dell's final offer.
"The addition of Quest will enable Dell to deliver more competitive server, storage, networking and end user computing solutions and services to customers," said John Swainson, president of Dell Software Group.
Dell is trying to diversify revenue base as consumer demand drops for its low-margin sales in personal computers. It will now compete against rivals HP and IBM for corporate technology products and services.
Dell, once the largest personal computer maker in the world, has lost out to HP for low-margin sales and to Apple for high-margin sales of personal computers. Past failed ventures in the personal computing world include a smartphone, and tablet, both of which fizzled before they caught the attention of consumers.
Dell dropped 1.4 percent to $12.34 in early trading. Quest, up 43 percent since Insight first made its offer, was down 0.2 percent at $27.75.