Quest Software Announces Receipt of Superior Proposal to Acquire the Company for $27.50 Per Share
June 25 2012 - 8:30AM
Business Wire
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
$27.50 per share in cash.
The Company’s Board of Directors, acting through the special
committee of independent directors established by the Company’s
Board of Directors (the “Special Committee”), determined that the
proposal constitutes a Superior Proposal, as such term is defined
in the Agreement and Plan of Merger dated March 8, 2012, as amended
on June 19, 2012 (the “Existing Merger Agreement”), among Quest and
affiliates of Insight Venture Management, LLC and Vector Capital
(together, the “Buyout Group”). In making its determination, 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 who have agreed to roll over their
shares in connection with the pending transaction with the Buyout
Group (the “Rollover Stockholders”) 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% 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 approximately
2.9% 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 agree to support the Superior
Proposal, the Company has agreed to (i) pay the bidder a break-up
fee of 2.5% of the transaction value or reimburse the bidder’s
out-of-pocket expenses up to $5 million if the proposed merger
agreement is terminated because the Superior Proposal is not
approved by a vote of the Company’s stockholders, and (ii) remove
the option described above.
Quest is a party to the Existing Merger Agreement among Quest
and the Buyout Group, pursuant to which the Buyout Group has agreed
to acquire all of the unaffiliated outstanding shares of Quest for
$25.75 per share in cash. In accordance with the Existing Merger
Agreement, Quest provided notice to the Buyout Group on Monday,
June 25, 2012 of the Board’s determination that the proposal from
the strategic bidder constitutes a Superior Proposal.
The Company’s Board of Directors has not changed its
recommendation with respect to the pending transaction with the
Buyout Group. Under the Existing Merger Agreement, the Buyout Group
has certain matching rights, including the right to propose
modifications to the terms of the Existing 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 Existing Merger Agreement and
related agreements and to enter into a binding written definitive
agreement in connection with the Superior Proposal.
About Quest
Established in 1987, Quest (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. For more information, go to www.quest.com.
Additional Information and Where to Find It
The Company has filed with the Securities and Exchange
Commission (the “SEC”) a preliminary proxy statement and intends to
furnish or file other materials with the SEC in connection with the
proposed transaction. The definitive proxy statement will be sent
or given to the stockholders of the Company and will contain
important information about the proposed transaction and related
matters. BEFORE MAKING ANY VOTING DECISION, QUEST’S STOCKHOLDERS
ARE URGED TO READ THE PROXY STATEMENT AND THOSE OTHER MATERIALS
CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANY AND THE PROPOSED TRANSACTION. The
proxy statement and other relevant materials (when they become
available), and any other documents filed by Quest with the SEC,
may be obtained free of charge at the SEC’s website at www.sec.gov.
In addition, security holders will be able to obtain free copies of
the proxy statement from Quest by contacting Quest’s Investor
Relations by telephone at (949) 754-8000, or by mail at Quest
Software, Inc., 5 Polaris Way, Aliso Viejo, California 92656,
Attention: Investor Relations, or by going to Quest’s Investor
Relations page on its corporate web site at www.quest.com.
Participants in the Solicitation
Quest and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the
stockholders of Quest in connection with the proposed merger.
Information regarding the interests of these directors and
executive officers in the transaction described herein has been
included in the preliminary proxy statement described above and
will be included in the definitive proxy statement to be filed with
the SEC. Additional information regarding these directors and
executive officers is included in Quest’s amended Annual Report on
Form 10-K/A, which was filed with the SEC on April 30, 2012.
Forward-Looking Statements
This release may include predictions, estimates and other
information that might be considered forward-looking statements,
including, without limitation, statements relating to the
completion of the proposed transaction. These statements are based
on current expectations and assumptions that are subject to risks
and uncertainties. Actual results could differ materially from
those anticipated as a result of various factors, including: (1)
the Company may be unable to obtain stockholder approval as
required for the transaction; (2) conditions to the closing of the
transaction may not be satisfied; (3) the transaction may involve
unexpected costs, liabilities or delays; (4) the business of the
Company may suffer as a result of uncertainty surrounding the
transaction; (5) the outcome of any legal proceedings related to
the transaction; (6) the Company may be adversely affected by other
economic, business, and/or competitive factors; (7) the occurrence
of any event, change or other circumstances that could give rise to
the termination of the transaction agreement; (8) the ability to
recognize benefits of the transaction; (9) risks that the
transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the transaction;
and (10) other risks to consummation of the transaction, including
the risk that the transaction will not be consummated within the
expected time period or at all. If the transaction is consummated,
our stockholders will cease to have any equity interest in the
Company and will have no right to participate in its earnings and
future growth. Additional factors that may affect the future
results of the Company are set forth in its filings with the SEC,
including its Annual Report on Form 10-K for the year ended
December 31, 2011 and Quarterly Report on Form 10-Q for the quarter
ended March 31, 2012, which are available on the SEC’s website at
www.sec.gov. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
thereof. The Company undertakes no obligation to update
forward-looking statements to reflect events or circumstances after
the date thereof.
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