Sandvine Shares Jump as Francisco Partners Said to Weigh Bid

  • Sandvine agreed to C$483 million buyout by Vector Capital
  • Francisco said to consider Sandvine combination with Procera

Shares in Sandvine Corp. jumped to their highest price in more than two years Tuesday, after Bloomberg reported that U.S. private equity firm Francisco Partners is weighing a rival bid for the Canadian technology company.

Sandvine rose more than 5 percent, the biggest move since the company agreed in May to be taken over by Vector Capital for C$483 million ($365 million). Shares traded at C$4.01 apiece in Toronto at 9:52 a.m., above Vector’s offer price of C$3.80 each.

Sandvine has a 42-day window to talk to other potential bidders under its May 26 agreement with Vector Capital. The company, which develops and markets broadband network-management tools, has since held talks with several interested parties, including buyout firm Francisco Partners, according to people familiar with the process, who asked not to be identified because the process is private. Francisco Partners would look to combine Sandvine with current portfolio company Procera Networks Inc., the people said.

Representatives of Sandvine didn’t respond to requests for comment, while representatives for San Francisco-based Francisco Partners weren’t available to comment.

If Francisco Partners submits a bid for Sandvine before the deadline, Vector has the right to match the offer within five business days, according to terms of the agreement. Vector’s initial bid was at a 20 percent premium to Waterloo, Ontario-based Sandvine’s share price before the offer.

Francisco Partners is targeting $3 billion for a fifth buyout fund that it plans to start in the fourth quarter, people familiar with the matter said last month. Led by founding partner and Chief Executive Officer Dipanjan Deb, Francisco Partners owns stakes in companies including SmartBear Software, IT administration and security company Quest Software Inc., and surveillance-software maker NSO Group Ltd.

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