Former Dell-owned business Quest Software snapped up for a reported $5.4bn

The investment drives Clearlake’s buy-and-build strategy and supports Quest Software customers and partners through digital transformation

US investment firm Clearlake Capital Group has signed a definitive agreement to acquire Quest Software from private equity company Francisco Partners for a reported $5.4bn.

The cybersecurity vendor said its current CEO, Patrick Nichols, will continue to lead the company supported by the existing executive management team.

Founded in 1987, California-HQ Quest Software bills itself as a critical software solution provider. It was previously owned by Dell Technologies, but was sold in 2016 amid its blockbuster $67bn acquisition of EMC.

It claims to enable today's edgeless IT ecosystem - across people, applications, and data to endpoints - allowing customers to maintain controls, mitigate and contain security threats proactively, and maintain operational up-time while decreasing costs.

Quest also claims to be the only identity-centric cybersecurity software vendor with One Identity and OneLogin services.

"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," said Clearlake co-founder and managing partner, Behdad Eghbali.

"We are excited to partner with Patrick and Carolyn McCarthy, Quest's CFO, to utilise 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."

Patrick Nichols adds: "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."

Terms of the transaction, which is expected to close in the first quarter of 2022, pending customary regulatory approvals and closing conditions, were not disclosed.

Clearlake will become the majority shareholder in Quest following its completion.

Goldman Sachs and J.P. Morgan acted as financial advisors to Quest Software.

Silicon Valley Tech Investment Bank and Morgan Stanley along with BoA Securities, Barclays, Evercore, and William Blair acted as financial advisors to Clearlake.