Francisco Partners Sells Quest Software to Clearlake Capital for $5.4B

Quest Software Changes Hands Again

In 2016, Francisco Partners acquired Quest Software during a period when Dell was divesting assets to finance its $67 billion acquisition of EMC. Dell had initially purchased Quest in 2012 for $2.4 billion.

Now, the company has been acquired once more, this time by Clearlake Capital. Reports from The Wall Street Journal indicate the transaction value is $5.4 billion.

Financial Details and Growth

Reuters previously reported that Francisco Partners and Elliot Management jointly paid approximately $2 billion for Quest and SonicWALL in 2016. Assuming these figures are correct, Francisco Partners realized a substantial return on its 2016 investment.

The firm successfully increased the company’s value to more than double its original price. It is important to note that the final sale price has not been officially confirmed by all involved parties.

Positive Performance and Leadership Retention

Although Quest Software operates as a private entity and isn't obligated to disclose its financial performance, indications suggest strong growth since the 2016 acquisition.

A key indicator of this success is Clearlake Capital’s decision to retain the current CEO, Patrick Nichols, along with the entire existing management team.

A Legacy Security Vendor

Founded in 1987, Quest Software has a long history of ownership transitions. Throughout these changes, the company has consistently adapted and maintained its relevance and increasing value within the security market.

Francisco Partners' Perspective

Dipanjan “DJ” Deb, co-founder and CEO of Francisco Partners, expressed satisfaction with the firm’s role in enhancing Quest Software’s value.

“We have a long and successful track record executing divisional carve-out transactions and are grateful to have had the opportunity to work with the Quest team to create value for the company, its customers and its partners,” Deb stated.

Product Portfolio and Strategic Alignment

Quest Software offers a comprehensive suite of security products, including One Identity and OneLogin for identity management, as well as endpoint security solutions and products tailored for Microsoft environments.

Clearlake Capital was attracted by the breadth of this portfolio and the established customer base that Quest Software brings to the table.

Clearlake Capital's Vision

“With a robust portfolio of market-leading software and SaaS solutions alongside a rich history of product innovation, we believe Quest is well-positioned to capitalize on emerging growth trends in identity-centric cybersecurity, data intelligence and IT operations management software markets,” said Prashant Mehrotra and Paul Huber of Clearlake.