Vector Capital to acquire Sandvine for $483M

Vector Capital has entered into an arrangement agreement, through Scalar AcquireCo Corp., to acquire all of the issued and outstanding shares of Sandvine Corporation (TSX: SVC), other than certain shares held by members of management, for $3.80 per share in cash.

The price per share implies an aggregate fully diluted equity value for Sandvine of approximately $483 million.

“The Sandvine Team has built the clear leader in network policy control and I am extremely proud of what we have accomplished to date,” said Dave Caputo, Sandvine’s President and Chief Executive Officer. “There are a number of long-term growth opportunities that Vector, as a specialist technology investor, is enthusiastic about and can help us pursue more aggressively. We see this as an excellent opportunity to better serve our 300-plus customers, to enhance our strategic position over the longer term, and to do it The Sandvine Way.”

“We are excited to partner with Dave and this deeply talented management team to take Sandvine to the next level,” said Rob Amen, a Managing Director at Vector Capital. “We are confident that, together with the founding team, Vector can enhance Sandvine’s proud track record of growth, innovation and independent operations. Vector was specifically formed to collaborate with market leading technology companies to accelerate their growth and redefine their markets in new and disruptive ways. We believe that Sandvine’s emerging product opportunities and transition to fully virtualized solutions represent an opportunity for such a disruption. Our partnership with this deeply talented Team couldn’t be stronger.”

Caputo, together with members of Sandvine’s senior management team, Don Bowman, Tom Donnelly, Brad Siim and Scott Hamilton (Rolling Shareholders) have agreed to exchange an aggregate of 5.1 million shares (representing the majority of their common share holdings) for shares of an affiliate of Scalar AcquireCo.

The Rolling Shareholders, who together hold in aggregate approximately 7.2 million of the fully‐diluted shares (representing approximately 5.7% of the fully‐diluted shares of the Company), have entered into voting support agreements with Scalar AcquireCo pursuant to which they have agreed to vote all of their shares in favour of the arrangement.

Sandvine board retained Canaccord Genuity as its exclusive financial advisor. Dentons Canada LLP is acting as Canadian legal counsel and Dentons US LLP is acting as US legal counsel to Scalar, the Board and the Special Committee. Stikeman Elliott LLP is acting as Canadian legal counsel to Vector Capital, and Paul Hastings LLP is acting as US legal counsel to Vector Capital. Blake, Cassels & Graydon LLP is acting as legal counsel to the Rolling Shareholders.

photo credit: Sandvine

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.