Quest software acquisition: Private Equity buys IT management and security software company (again)

by Joe Panettieri • November 29, 2021

Private equity firm Clearlake Capital Corp. acquired Quest Software from Francisco Partners, according to a Wall Street Journal report.

This is technology merger and acquisition deal number 739 that ChannelE2E has covered so far in 2021. See all tech merger and acquisition deals for 2021 and 2020 listed here.

Acquisition of quest software: IT management, evaluation of security software transactions

The deal values ​​Quest Software – an IT security and management software company – at $ 5.4 billion, including debt, and 10.9 times Quest’s EBITDA (earnings before interest, taxes, depreciation and amortization). in the past 12 months, according to the report.

ChannelE2E is checking whether the sale of the Quest Software business includes the One Identity business unit, which acquired OneLogin in October 2021.

Francisco Partners and Elliott Management acquired Quest from Dell Technologies in 2016. The move helped Dell strengthen its balance sheet for the massive takeover of EMC that year. Under the ownership of Francisco Partners, Quest Software also separated in 2016 from SonicWall, a firewall vendor that became a unified security company focused on MSPs and MSSPs.

Evolution of the Quest Software Business

Quest underwent a business transformation by 2020, appointing Patrick Nichols as CEO and hiring several CXOs as his lieutenants. Quest has also moved from client-server software to cloud-based solutions. The course involved organic R&D (research and development) and acquisitions. The main purchases of IT management and security software include:

• 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.

Meanwhile, Quest also has a mixed history in the MSP partner market. Under the former Dell ownership, Quest in 2013 shut down PacketTrap, a software unit that developed RMM (remote monitoring and management) and PSA (professional services automation) software for MSPs. Many small business distribution partners have never forgotten the move.

Fast forward to today. Quest’s core software products address business and security needs such as:

• Microsoft Active Directory management and security;
• data governance;
• data operations;
• Data protection;
• unified identity and security;
• migration and consolidation; and
• unified terminal management.

Clearlake Capital: Focus on private equity and software

While Quest Software is best known in the enterprise software market, Clearlake Capital is also known for its technology investments focused on SMEs.

One example is acquiring Endurance, a cloud company and hosting provider that serves small businesses. The Endurance portfolio includes Constant Contact, Bluehost, HostGator and Domain.com.

As of this writing, Clearlake has not publicly confirmed the acquisition of Quest Software, although the purchase from Francisco Partners can be announced as of today (Monday, November 29, 2021), Wall Street reported. Newspaper.