Nov 29, 2021 - Economy

Clearlake Capital Group to buy Quest Software for $5.4 billion

Illustration: Brendan Lynch/Axios

Illustration: Brendan Lynch/Axios

Clearlake Capital Group agreed to buy Quest Software, an Aliso Viejo, Calif.-based provider of enterprise management software, from Francisco Partners for $5.4 billion (including debt).

Why it matters: This reflects ongoing private equity bounty from Dell's 2013 decision to go private, and its subsequent merger with EMC.

  • In this case, Quest Software was born via Francisco's $2.4 billion carveout in 2016 of Dell's software unit, which was then split into two companies (the other, SonicWall, has been rumored to also be for sale).

The bottom line: "It is the latest big buyout in software, whose steady cash flow has become a major draw for private-equity firms, as they set their sights on bigger and bigger deals .... The price Clearlake is paying amounts to 10.9 times Quest's EBITDA for the last 12 months." — Miriam Gottfried, WSJ

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