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Successful Closing of Public Offering and Listing on TSX

Waterloo, Ontario, 26 October 2006 – Sandvine Corporation announced today that it has completed its public offering of 21,053,000 common shares at a price of $1.90 (£ 0.90) per common share (the “Offering”). The Offering consisted of a treasury issue of 7,895,000 common shares and a secondary offering of 13,158,000 by certain existing shareholders for total gross proceeds of $40,000,700. The common shares will begin trading today on the Toronto Stock Exchange under the symbol “SVC”. Sandvine’s common shares are currently admitted and quoted for trading on the AIM Market of the London Stock Exchange under the symbol “SAND”. 

The Offering was made through an underwriting syndicate which was co-led by Canaccord Capital Corporation and CIBC World Markets Inc., which included RBC Dominion Securities Inc., BMO Nesbitt Burns Inc. and National Bank Financial Inc.

The common shares issued pursuant to this Offering have not been, and will not be, registered under the United Securities Act of 1933, as amended (the “Act”) and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirement of such Act.  Accordingly, this press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or same would be unlawful prior to qualification under the securities laws of any such jurisdiction.

Sandvine will be releasing its Q3 results for the period ending 31 August 2006 on Monday 30 October 2006 at approximately 7 a.m. Eastern Time (GMT-5 hours). Management will discuss the results on a call to be held that morning at 9 a.m. Eastern Time. Dial in information for the call will be provided in the press release issued that morning. 
 
Transaction Highlights

  • The Offering consisted of the new issue of 7,895,000 common shares and a secondary offering of 13,158,000 common shares by certain existing shareholders of Sandvine
  • The Group’s shares will begin trading on the Toronto Stock Exchange (“TSX”) today
  • The funds raised from the new issue of shares will be used:
    • to fund acceleration of the Group’s growth in the markets of new emerging access technologies such as fibre-to-the-home and wireless;
    • to fund increased research and development and marketing activities; and
    • to fund general corporate purposes.
  • Lead Underwriters and Joint Book Runners to the transaction were Canaccord Capital Corporation and CIBC World Markets Inc.
  • RBC Dominion Securities Inc., BMO Nesbitt Burns Inc. and National Bank Financial Inc. together with the Lead Underwriters and Joint Book Runners were the Underwriters

Dave Caputo, President and CEO for Sandvine commented:

"We are delighted with the strong level of support shown by both our existing and new shareholders. We believe that our products will become increasingly strategic to broadband network providers and the proceeds from this fundraising will be used to accelerate our strategy of capitalising on emerging technologies.

I look forward to updating the market on the Company’s growth with our third quarter results next week."

Placing Statistics

 
(Canadian $’s)
(Sterling £’s)
Placing Price
$1.90
£0.90
Number of Common Share prior to the Offering
114,574,816
Number of Common Shares being issued by the Company pursuant to the Offering
7,895,000
Number of Common Shares in the secondary Offering
13,158,000
Fully diluted share capital following the Offering
122,469,816
Percentage of Enlarged Share Capital being placed pursuant to the Offering
17%
Total gross proceeds of the Offering
$40,000,700
£18,900,000
Estimated net proceeds of the Offering receivable by the Company
$14,100,000
£6,667,000

Notes:

  1. These statistics do not take account of any exercise of the over-allotment option referred to below. See the Company’s Prospectus for further details.
  2. Based on exchange rate of CDN$2.11 to GBP£1 being the Bank of Canada's daily noon buying rate at October 24, 2006 and rounded up to the nearest whole figure.

Over-Allotment Option and Stabilization Transactions

In connection with the Offering, the Underwriters may engage in over-allotment and stabilising transactions in relation to the common shares. Certain of Sandvine’s existing shareholders have granted the Underwriters an option (the ‘‘Over-Allotment Option’’) to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option may be exercised by the Underwriters, in whole or in part, for a 30-day period following the closing of the Offering, and entitles the Underwriters to purchase from certain of the existing shareholders up to that number of common shares as is equal to 15% of the aggregate number of common shares sold pursuant to this Offering, at the Offering price. The Company will not issue any new common shares on exercise of the Over-Allotment Option.

Forward-Looking Statements

Any forward-looking statements in this press release are based on current expectations that are subject to significant risks and uncertainties that are difficult to predict.  Actual results may differ materially from projections suggested in any forward-looking statements due to a number of risks including those associated with the business of Sandvine, the proposed offering and regulatory matters.  Sandvine assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.  Readers are cautioned not to place undue reliance on forward-looking statements.  Additional information identifying risks and uncertainties are contained in Sandvine’s prospectus filed with the Canadian securities regulatory authorities, available at www.sedar.com.

About Sandvine Corporation

Sandvine is headquartered in Waterloo, Ontario, Canada and has operations worldwide.  Sandvine develops and markets broadband network management equipment and solutions for use by residential broadband service providers.  Its network management equipment and solutions help broadband service providers identify the types and behaviours of traffic on their networks, with the aim of allowing service providers to improve subscriber satisfaction, reduce operational costs and increase profitability.

For further details

Sandvine Corporation
Amanda Weber, Communications Director
Scott Hamilton, Chief Financial Officer 

Tel: +1 519 880 2600

Buchanan Communications
Bobby Morse / Jeremy Garcia / James Strong 
Tel: +44 (0)20 7466 5000