Private equity firm Clearlake Capital buys Quest Software from Francisco Partners in a $5.4 billion deal

Private equity firm Clearlake Capital has acquired IT management and security software startup Quest Software from Francisco Partners, according to a report from The Wall Street Journal, citing people familiar with the matter.

The deal, which values Quest Software at $5.4 billion, includes debt, and 10.9 times Quest’s EBITDA (earnings before interest, taxes, depreciation, and amortization) for the last 12 months, the report said.

Quest Software was previously part of Dell’s software division before the company divested in 2016 to focus on its technology portfolio and strengthen its balance sheet after it agreed in October to buy data storage company EMC for $67 billion. On November 1, 2016, Francisco Partners and Elliott Management completed the purchase of Dell Software, and the software giant relaunched itself again as Quest Software.

Under Francisco Partners’ ownership, Quest Software in 2016 also broke apart from SonicWall, a firewall provider that has evolved into a unified security company focused on MSPs and MSSPs.

Founded in 1987 by David M. Doyle, Quest is a developer of windows management, application management, virtualization management, and database management software. The company provides software solutions to IT departments spanning from database management to data protection.

Quest software is used by 130,000 companies across 100 countries, including 95% of the Fortune 500 and 90% of the Global 1000. Quest helps its customers manage and protect their data, take control of their hybrid environments, keep track of all network-connected devices, stay compliant, and govern every identity across the enterprise.

Prior to being acquired by Clearlake Capital, Quest Software acquired two companies within the last 12 months. On September 2, 2020, Quest acquired Binary Tree. Then early this year on January 5, 2021, Quest acquired Erwin, Inc. a company that makes data modeling software called Erwin Data Modeler.