Quest Software Shares Soared: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Quest Software (NAS: QSFT) are soaring today by as much as 27% after the company announced it has agreed to go private.

So what: Private-equity firm Insight Venture Partners has agreed to pay $23 per share, a 19% premium over yesterday's close, to take Quest private in a deal that values the company at $2 billion. The deal includes a 60-day window in which Quest can shop itself to other potential suitors to see if it can grab a better offer, but it would have to pay a $4.2 million breakup fee.

Now what: After that window expires, the amount of the breakup fee would jump to $6.3 million. Chairman and CEO Vinny Smith will continue to lead the company after the transaction closes, and the company's board has unanimously approved the deal. Smith holds more than a third of the company, and that ownership will be rolled over into the new private company.

Interested in more info on Quest Software? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.