Sandvine to be combined with Procera in $444M deal

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Sandvine terminated a deal with Vector Capital to accept the offer from Francisco Partners.

Private equity firm Francisco Partners said it will spend roughly $444 million to acquire Sandvine Corp., then will combine the company with its own Procera Networks.

Sandvine is based in Waterloo, Ontario, and provides network equipment for wireless carriers, cable companies, fixed wireless businesses and other operators to help offer new services and manage network congestion, among other things. Procera, which is based in Fremont, California, sells internet intelligence addressing concerns such as deep packet inspection, policy charging and data analytics, enabling offerings such as parental controls, zero-rated content and real-time network monitoring.

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

Sandvine’s customers include Telefonica, Digicel, C Spire Wireless and VivaCell.

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

The move appears to end something of a bidding war for Sandvine, which had accepted an offer from Vector Capital valuing the company at $414 million. That deal was terminated today when Sandvine accepted Francisco Partners’ bid.

The cash deal marks a 40% premium compared to Sandvine’s closing stock price of $2.48 per share on May 25.

“We are excited to bring together two great companies and teams in the combination of Procera and Sandvine,” said Andrew Kowal, a partner at Francisco Partners, in the announcement. “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.”