Everyone is watching: Francisco Partners yesterday offered to buy Sandvine Corp., a Toronto-listed provider of network policy control solutions, for C$4.15 per share. This tops a C$3.80 per share bid from Vector Capital, which SandVine previously accepted and gave the company a fully-diluted equity value of C$483 million. Vector now has five days to figure out its next step, but this deal might have more consequence than a typical private equity bidding war.Read More
Francisco seeks to combine SandVine with existing portfolio company Procera Networks. If that latter company sounds familiar, perhaps that's because its accused of providing technology to Turkey's government that allowed the country's strongman president to spy on his own citizens – via deep-packet inspection technologies that SandVine also provides. Details of the relationship were leaked by Procera employees, some of whom reportedly believed the company's ethical compass shifted when Francisco took control in 2015. Francisco and Procera, for the record, denied any wrongdoing.
Francisco also controls Israeli cyber-surveillance company NSO Group, whose software by the Mexican government to spy on journalists and anti-corruption advocates. NSO's paid advisors have included Michael Flynn, the now-former Trump national security advisor who also last year provided consulting work to Francisco.
Vector Capital doesn't have any existing portfolio companies in this space. But it also isn't commenting on how it would manage or monitor Sandvine, in terms of sales to certain foreign government entities.
Surge stuff: Uber has held multiple meetings with the SEC about how it can provide equity to its drivers, who are contractors rather than employees, Axios has learned.
Why it matters: If Uber and the SEC come to an agreement, it could provide a legal template for other gig economy companies.
From Wild Ride, by Adam Lashinsky: "Kalanick lights up. He says he wants to give equity to drivers... but Uber has found the securities-law implications to be complicated."
Context: New York-based ride-hail company Juno had promised drivers restricted stock units (so long as they met certain requirements), but the SEC objected to the structure. So much so, in fact, that Juno told drivers via email that it was "considering, among other things, whether the RSUs previously granted were void under the terms of the RSU program." That same email also announced that Juno was being acquired by Israel-based Gett, which effectively voided the RSUs anyway (with Juno drivers).
• Benched: DraftKings and FanDuel have not yet decided on if they plan to challenge the FTC's
their proposed merger, per a source close to the situation.
• Down round: Blue Apron priced its IPO last night at just $10 per share, giving it a fully diluted market value of around $2.27 billion. Worth noting that Series D preferred shares were sold at $13.32, and convert on a one-for-one basis into Class B stock (more voting rights, but 1:1 conversion into Class A).
• Today in Binary Capital: Remaining partner Jonathan Teo, in part due to ""continued questions regarding my behavior." Expect LPs to take him up on it, once they figure out more wind-down details and if Justin Caldbeck has legally resigned. In-house PR guy Johnny Brackett has quit. A former Binary Capital employee, Ann Lai, claiming harassment and defamation. Really remarkable how quickly all of this happened, as the original expose in The Information was published just one week ago today.