Sand­vine agrees to takeover by PNI at $4.40 a share

Sand­vine Corp. has agreed to a takeover by PNI Canada Ac­quireco Corp. at $4.40 a share. The com­pany has post­poned its spe­cial meet­ing of share­hold­ers sched­uled for July 18.

Stockwatch Daily - - FRONT PAGE - Mr. Dave Ca­puto re­ports

SAND­VINE CORP. has en­tered into an ar­range­ment agree­ment with PNI Canada Ac­quireco Corp., an af­fil­i­ate of Fran­cisco Part­ners and Pro­cera Net­works Inc., pur­suant to which PNI will ac­quire all of the is­sued and out­stand­ing com­mon shares of Sand­vine by way of plan of ar­range­ment for cash con­sid­er­a­tion of $4.40 per share. The price per share im­plies an ag­gre­gate fully di­luted eq­uity value for Sand­vine of ap­prox­i­mately $562-mil­lion.

The cor­po­ra­tion’s spe­cial meet­ing of share­hold­ers sched­uled for July 18, 2017, has been post­poned, and a meet­ing to con­sider the PNI ar­range­ment will be held at a date to be de­ter­mined by the board of direc­tors of the cor­po­ra­tion.

The com­bined com­pany will be led by Pro­cera’s chief ex­ec­u­tive of­fi­cer, Lyn­don Can­tor, and Pro­cera’s chief fi­nan­cial of­fi­cer, Richard Deggs, and will re­tain the Sand­vine name.

“Sand­vine has done a tremen­dous job be­com­ing a leader in its mar­ket,” said Mr. Can­tor. “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 pre-em­i­nent 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.

Pro­cera pro­vides net­work vis­i­bil­ity and con­trol across mo­bile and fixed broad­band net­works, trans­form­ing data into ac­tion­able in­tel­li­gence for op­er­a­tors to make in­formed busi­ness de­ci­sions and im­prove the qual­ity of sub­scriber ex­pe­ri­ence. To­gether, the two com­pa­nies will be the pre­mier provider of net­work in­tel­li­gence so­lu­tions to com­mu­ni­ca­tion ser­vice providers around the world.

“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 one bil­lion sub­scribers in more than 100 coun­tries, as well as over 500 en­ter­prise cus­tomers and more than 100 OEM [orig­i­nal equip­ment man­u­fac­tur­ing] 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.

Trans­ac­tion high­lights

• The cash pur­chase price rep­re­sents a 40-per-cent pre­mium to Sand­vine’s clos­ing share price of $3.15 on May 26, 2017, and a 61-per-cent pre­mium to the cash-ad­justed clos­ing price on May 26, 2017.

• The cor­po­ra­tion’s board of direc­tors, based on the rec­om­men­da­tion of a spe­cial com­mit­tee of in­de­pen­dent direc­tors, has unan­i­mously ap­proved the PNI ar­range­ment and rec­om­mends that Sand­vine share­hold­ers vote in favour of the PNI ar­range­ment.

• Fol­low­ing clos­ing, Sand­vine com­mon shares will be delisted from the Toronto Stock Ex­change and no longer traded pub­licly.

Trans­ac­tion de­tails

The im­ple­men­ta­tion of the PNI ar­range­ment will be sub­ject to share­holder ap­proval at the spe­cial meet­ing, which is ex­pected to be held in Au­gust, 2017.

Se­nior man­age­ment of Sand­vine (in­clud­ing the chief ex­ec­u­tive of­fi­cer and chief fi­nan­cial of­fi­cer), who to­gether hold in ag­gre­gate ap­prox­i­mately 4.9 mil­lion of the fully di­luted shares (rep­re­sent­ing ap­prox­i­mately 3.9 per cent of the fully di­luted shares of the cor­po­ra­tion), have en­tered into sup­port agree­ments with PNI, pur­suant to which they have agreed to vote all their shares in favour of the PNI ar­range­ment.

We seek Safe Har­bor.

Erika Flores con­densed this news re­lease (erikaf@stock­

Osama Arafat, David Ca­puto, Scott D Hamil­ton, Roger J Maggs, Der­mot O’Car­roll, Ken­neth James Tay­lor, Gemma Toner

(SVC) Shares: 123,479,526

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