PNI Locks in Deal to Buy Sandvine

Bandwidth management specialist Sandvine Corp. said it has entered a deal to be acquired by PNI Canada Acquireco Corp., an affiliate of Francisco Partners and Procera Networks.

As a result, Sandvine will also be merged with Procera Networks, a bandwidth management/network intelligence firm owned by Francisco Partners.

Under the deal, PNI will pay C$4.40 per share, implying an aggregate fully-diluted equity value for Sandvine of about C$562 million.

That beat out an earlier bid of C$3.80 per share from Vector Capital affiliate Scalar AcquireCo Corp. that was announced in May. The cash purchase price also represents a 40% premium to Sandvine's closing share price of C$3.15 on May 25, and a 64% premium to the cash-adjusted closing price on May 25.

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Sandvine said a special meeting of shareholders scheduled for July 18 has been postponed and a meeting to consider the PNI proposal will be held at a date to be determined by Sandvine’s board.

The termination fee payable to PNI, in certain circumstances, is C$16.9 million.

Waterloo, Ontario-based Sandvine said the combined company will be led by Procera CEO Lyndon Cantor and Procera CFO  Richard Deggs, and retain the Sandvine name.

Sandvine, whose network policy control solutions are deployed in more than 300 networks in over 100 countries, is also known for publishing its Global Internet Phenomena studies.

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“Sandvine has done a tremendous job becoming a leader in its market,” Cantor said in a statement. “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.”

“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,” added Dave Caputo, Sandvine’s president and CEO, who will join the board of the combined company as non-executive chairman.