Francisco Partners’ Procera to acquire Sandvine for $562M

Ted Liu

PNI Canada Acquireco Corp., an affiliate of Francisco Partners and Procera Networks, Inc., has entered into an arrangement agreement to acquire all of the issued and outstanding common shares of Sandvine Corporation (TSX: SVC) for cash consideration of $4.40 per share, for an aggregate fully-diluted equity value of approximately $562 million.

The combined company will be led by Procera’s CEO, Lyndon Cantor, and Procera’s CFO, Richard Deggs, and retain the Sandvine name.

“Sandvine has done a tremendous job becoming a leader in its market,” said Lyndon Cantor, the Chief Executive Officer of Procera. “Along with the rest of the Procera team, we look forward to bringing the best of both companies together to accelerate our strategy as the preeminent provider in the emerging Network Intelligence market. The combined organization will deliver greater capability to serve our customers, execute on innovation initiatives and expand our addressable market.”

“This is a very exciting next step for Sandvine and Procera. As technologies and networks continue to evolve, I firmly believe that the combination of Sandvine and Procera creates the premier provider in our markets—with the scale and innovation needed to address our customers’ opportunities to build more intelligent networks,” said Dave Caputo, Sandvine’s President and Chief Executive Officer, who will join the Board of Directors of the combined company as Non-Executive Chairman.

“We are excited to bring together two great companies and teams in the combination of Procera and Sandvine,” said Andrew Kowal, Partner at Francisco Partners. “The combined company will serve over 400 communications service provider customers, with over 1 billion subscribers in more than 100 countries, as well as over 500 enterprise customers and more than 100 OEM and channel partners. We are confident that the combined capabilities of these two companies will deliver more innovative solutions and greater value to customers.”

“The Special Committee and the entire Board of Directors of Sandvine is pleased with the outcome of this process. We firmly believe that this transaction creates the most value for our shareholders today and for customers and the Sandvine team well into the future,” said Ken Taylor, Sandvine Director and Chairman of the Special Committee.

Sandvine has terminated the previously announced amended and restated arrangement agreement with Scalar Acquireco Corp., an affiliate of Vector Capital. Sandvine paid $16.9 million, less applicable withholding taxes, to Scalar. Under Vector Capital revised arrangement of $4.15 per share, Sandvine would have been valued at a fully diluted equity value of approximately $529 million.

Canaccord Genuity Corp. acts as exclusive financial advisor to Sandvine board. Dentons Canada LLP is acting as Canadian legal counsel and Dentons US LLP is acting as US legal counsel to the Board of Directors and the Special Committee.

Procera is being advised on the transaction by J.P. Morgan Securities, LLC. Osler, Hoskin & Harcourt LLP is acting as Canadian legal counsel to Procera and Francisco Partners, and Kirkland & Ellis is acting as US legal counsel to Procera and Francisco Partners.

photo credit: Sandvine