Dell has won its bidding war to secure Quest Software in a $2.4bn (£1.53bn) deal announced last night.
Its victorious bid, of $28 per share, topped an earlier offer of $25.75 per share from a buyout group led by private equity house Insight Venture Management.
Dell will add IT management specialist Quest to its Software Group. It said the firm's identity and access management, performance monitoring, Windows Server management and database management solutions would complement its existing offering.
Insight had looked the favourite to land Quest before a "strategic bidder", thought to be Dell, re-entered the race last week with a $2.32bn offer.
John Swainson, president of Dell 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."
Vinny Smith, chief executive of Quest Software, which has a 1,500-strong software sales team and 1,300 developers, claimed the companies fit well together.
"With this transaction, Quest's products and employees become the foundation for Dell's critical software business," he said.
Dell expects the transaction to close in its fiscal third quarter ending October.
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