Francisco Partners flips Quest Software to Clearlake Capital in deal reportedly worth $5.4B

Francisco Partners bought Quest Software in 2016 when Dell was selling off some assets to help pay for the massive $67 billion EMC deal. Dell itself had purchased Quest in 2012 for $2.4 billion. Today, the company was on the move again, with Clearlake Capital picking it up this time.

According to The Wall Street Journal, the firm bought Quest for $5.4 billion. Reuters reported in 2016 that Francisco and Elliot Management paid around $2 billion for Quest and another asset, SonicWALL. If all of these figures are accurate, Francisco made a nice little profit off of its 2016 investment and managed to nurture the company to more than double its value. It’s worth noting that the parties have not officially acknowledged the price.

While a private company doesn’t have to reveal its financials, it seems likely that Quest has been doing pretty well since the 2016 transaction. Perhaps even more revealing is that Clearlake has decided to retain CEO Patrick Nichols and his entire management team.

Quest is your classic legacy security vendor. The company was founded in 1987 and has been shuffled between owners, modernizing along the way and managing to continually stay alive and increase in value.

Dipanjan “DJ” Deb, co-founder and CEO at Francisco Partners, is justifiably proud of building Quest into a more valuable property under its stewardship.

“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 said in a statement about the deal.

The company has built up a stable of security products, including identity products One Identity and OneLogin. It also offers an endpoint solution and a Microsoft-focused security product, among other products and services. Clearlake certainly liked the broad portfolio and customer base that Quest is bringing to them.

“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,” Clearlake’s Prashant Mehrotra and Paul Huber said in a statement.

The deal is expected to close early next year pending standard regulatory approval.