Quest Software Announces Receipt of Superior Proposal
Quest Software, Inc. (NASDAQ: QSFT) (the “Company” or “Quest”) announced the receipt of a proposal from a strategic bidder to acquire all of the outstanding shares of Quest common stock for $25.50 per share in cash.
Following the recommendation of the special committee of independent directors established by the Company’s Board of Directors (the “Special Committee”), the Company’s Board of Directors determined that the proposal constitutes a Superior Proposal, as such term is defined in the Agreement and Plan of Merger dated March 8, 2012 (the “Insight Merger Agreement”). In making its recommendation, the Special Committee consulted with its independent financial advisors and outside legal counsel.
The definitive terms and conditions of a merger agreement detailing the proposal have been fully negotiated, and the agreement is subject only to execution by the Company. The proposal is not subject to any financing contingencies. In addition, in the event that the stockholders (the “Rollover Stockholders”) who have agreed to roll over their shares in connection with the proposed transaction with affiliates of Insight Venture Partners (“Insight”) do not support the Superior Proposal, the Company has agreed to (i) grant to the bidder an option to acquire newly issued shares equal to 19.9 percent of the Company’s issued and outstanding shares as of the date of the agreement and (ii) pay to the bidder a break-up fee of 3.5% of the transaction value if the proposed merger agreement is terminated under certain circumstances, or a break-up fee of 2% of the transaction value if the proposed merger agreement is terminated because the Superior Proposal is not approved by the vote of the Company’s stockholders. Alternatively, in the event that the Rollover Stockholders do agree to support the Superior Proposal, the proposal includes certain alternative terms, including reduced break-up fees and removal of the option described above.
Quest is a party to the Insight Merger Agreement among Quest and affiliates of Insight, pursuant to which Insight agreed to acquire all of the unaffiliated outstanding shares of Quest for $23.00 per share in cash. In accordance with the Insight Merger Agreement, Quest provided notice to Insight on Thursday, June 14, 2012 of the Board’s determination that the proposal from the bidder constitutes a Superior Proposal.
The Company’s Board of Directors has not changed its recommendation with respect to the pending transaction with Insight. Under the Insight Merger Agreement, Insight has certain matching rights, including the right to propose modifications to the terms of the Insight Merger Agreement and related agreements prior to the expiration of a minimum three-business-day period. If the proposal continues to constitute a Superior Proposal after the expiration of such period, the Company expects to terminate the Insight Merger Agreement and related agreements and to enter into a binding written definitive agreement in connection with the Superior Proposal.
Established in 1987, Quest Software (Nasdaq: QSFT) provides simple and innovative IT management solutions that enable more than 100,000 global customers to save time and money across physical and virtual environments. Quest products solve complex IT challenges ranging from database management, data protection, identity and access management, monitoring, user workspace management to Windows management.
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