Technology firm Quest Software Inc. has agreed to go private in a deal valued at $2 billion.
The Aliso Viejo software company said Friday that it had agreed to be acquired by private equity firm Insight Venture Partners for $23 a share in cash, a 19% premium over its closing price Thursday.
The announcement led to a surge in Quest's stock price, with shares rising $4.67, or 24%, to close Friday at $24.07, as some investors bought on the prospects of a bidding war for the company.
Quest, a 25-year-old firm with 3,850 employees, sells enterprise software, information technology management solutions and related services. Its clients — mostly companies, nonprofits and government entities — include Papa John's, Darigold, Amway, San Bernardino County and the University of Massachusetts Medical School.
Under the terms of the deal, Quest Chairman and Chief Executive Vinny Smith would continue to lead the company, and the existing senior management team would remain in place. Quest said the deal was unanimously approved by its board of directors with the exception of Smith, who recused himself from the vote.
"As a private company, we will have increased flexibility to drive innovation across our product lines and execute our long-term strategy," Smith said in a statement.
The agreement also includes a 60-day "go-shop" period during which a special committee at Quest "will actively" solicit and evaluate alternative buyout proposals. "There can be no assurance that this process will result in a superior offer," the company said.
Founded in 1995, New York-based Insight Venture Partners has raised more than $5 billion and made more than 150 investments, which are focused on the global software, infrastructure software, Internet and data services industries.