Quest Software Inc., a former Dell Technologies Inc. business unit, is being acquired by private equity firm Clearlake Capital Group.

Aliso Viejo, California-based Quest announced the deal today without disclosing financial terms. Sources told the Wall Street Journal that the sale values the company at $5.4 billion, including debt. The sale will reportedly provide a more than sixfold return on investment for Francisco Partners, which bought Quest in 2016 together with Elliott Management.

Quest is a major provider of enterprise software that claims more than 100,000 customers and competes in multiple market segments. It originally launched in 1987 as a provider of applications for mainframes. Over the next 15 years, Quest evolved from a startup into a publicly traded company with more than 1,400 employees. 

The company was eventually acquired in 2012 by Dell for $2.36 billion. The same year, Dell combined the company with assets that it obtained from a number of prior acquisitions to form a division called Dell Software. 

Francisco Partners, the private equity firm from which Clearlake is now buying Quest Software for a reported $5.4 billion, joined the fray in 2016. That year, Dell completed its $67 billion acquisition of EMC and sold off a number of secondary business units, including its software division. Francisco Partners acquired Dell’s software division together with Elliott Management and relaunched key parts of the division as an independent company called Quest Software.

Quest provides a large number of enterprise software products spanning multiple categories. The company counts the cybersecurity, data management and device administration markets among its focus areas. 

In the cybersecurity market, Quest competes with a collection of identity and access management products that enterprises use to help employees securely log into work applications. The company also provides software for protecting Active Directory deployments from cyberattacks. Active Directory is a popular Microsoft Corp. application that enterprises rely on to manage employee access to their internal applications.

In the data management market, Quest provides tools that help workers find the business records they need for analytics projects. For information technology teams, the company offers a range of data protection tools.

Quest provides its cybersecurity and data management products alongside a number of solutions for managing enterprise devices. Quest’s customers use its tools for tasks such as configuring employee endpoints and downloading cybersecurity patches. It provides features for maintaining other types of information technology assets as well, including relational databases and software containers.

The company says its software is used by more than 100,000 customers worldwide. The company’s clients include 97 of the enterprises on the Fortune 100 list.

Quest’s sale to Clearlake is expected to close in the first quarter of 2022. Afterwards, Clearlake reportedly plans to make a number of strategic acquisitions to expand Quest’s market presence to yet more areas and support business growth.

 “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,” stated Quest Chief Executive Patrick Nichols. 

Image: Quest