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Sandvine Enters Into Amended And Restated Arrangement Agreement With Vector Capital Affiliate Scalar Acquireco Corp.

WATERLOO, ONTARIO – July 6, 2017 – Sandvine Corporation ("Sandvine" or the "Company") (TSX: SVC) announced today that it has accepted an amended proposal from  Scalar Acquireco Corp. ("Scalar"), an affiliate of Vector Capital, and entered into an amended and restated arrangement agreement (the "Amended Arrangement Agreement") with Scalar. Pursuant to the Amended Arrangement Agreement, Scalar will acquire all the issued and outstanding common shares of Sandvine, other than certain shares held by members of management (the "Rolling Shareholders"), for CAD$4.15 per share pursuant to a statutory plan of arrangement (the "Arrangement"). The price per share implies an aggregate fully diluted equity value for Sandvine of approximately CAD$529 million.

Upon receipt of the revised proposal from Scalar, the board of directors of Sandvine (the "Board") determined that the proposal previously received from Francisco Partners ceased to represent a superior proposal. Following the Board's determination, the Amended Arrangement Agreement was unanimously approved by the Board and the special committee of independent directors of the Board (the "Special Committee") (with interested directors abstaining).

The Board and the Special Committee (with interested directors abstaining) have unanimously recommended that shareholders vote in favour of the Arrangement. The special meeting of shareholders to consider and, if deemed advisable, approve the Arrangement remains scheduled for July 18, 2017.

In making their respective determinations to recommend in favour of the Arrangement, the Board and the Special Committee considered, among other factors, a fairness opinion from Canaccord Genuity Corp., to the effect that the consideration payable under the Amended Arrangement Agreement is fair, from a financial point of view, to the shareholders (other than the Rolling Shareholders) (the "Fairness Opinion").

Pursuant to the Amended Arrangement Agreement:

  • The cash purchase price represents a 32% premium to Sandvine's closing share price of CAD$3.15 on May 26, 2017 and a 50% premium to the cash-adjusted closing price on May 26, 20171.
  • Each incentive stock option of the Company that has an exercise price per share that is less than CAD$4.15 will be exchanged at closing of the Arrangement for a cash amount equal to the difference between the exercise price of such options and CAD$4.15.
  • The go-shop period previously provided to Sandvine continues until 11:59 p.m. (Toronto time) on July 7. 2017. Following the go-shop period, Sandvine will be subject to a non-solicitation covenant, with customary fiduciary out provisions.
  • Sandvine is permitted to terminate the Amended Arrangement Agreement in certain circumstances, including in order to allow the Board to accept a superior proposal subject to certain conditions, including Scalar's right to match. The Amended Arrangement Agreement provides for a termination fee of CAD$16.9 million.
  • Sandvine will be entitled to seek specific performance or to receive a reverse termination fee of CAD$42 million in certain circumstances.
  • Scalar has agreed to an increased level of commitment with respect to obtaining required regulatory approvals.

1. The “cash-adjusted” calculation deducts the Company’s cash and investments on hand at May 31, 2017, from both its market capitalization and from the total acquisition price implied by the offer in order to better measure the premium being offered.

Other than as disclosed herein, all other material terms and conditions of original arrangement agreement dated May 26, 2017 entered into between Scalar and Sandvine (the "Original Arrangement Agreement") remain unchanged.

A copy of the Amended Arrangement Agreement, a blackline to the Original Arrangement Agreement dated May 26, 2017 entered into between Scalar and Sandvine and the Fairness Opinion will be filed and available under Sandvine's SEDAR profile at www.sedar.com.

ABOUT SANDVINE

Sandvine's network policy control solutions add intelligence to fixed, mobile and converged communications service provider networks, to increase revenue, reduce network costs and improve subscriber quality of experience. Our networking solutions perform end-to-end policy control functions, including traffic classification, policy decision, and enforcement. Deployed as virtualized network functions or on Sandvine's purpose-built hardware, the products provide actionable business insight, and the ability to deploy new consumer and business subscriber services, optimize and secure network traffic, and engage with subscribers.

Sandvine's network policy control solutions are deployed in more than 300 networks in over 100 countries, serving hundreds of millions of data subscribers worldwide. www.sandvine.com.

INVESTOR CONTACT
Rick Wadsworth
Sandvine
+1 519 880 2400 ext. 3503
rwadsworth@sandvine.com

MEDIA CONTACT
Dan Deeth
Sandvine
+1 519 880 2232
ddeeth@sandvine.com

FORWARD-LOOKING STATEMENTS

This press release includes certain forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. In particular, this press release contains forward-looking statements relating to, among other things, the acquisition of all of the common shares of Sandvine, the Arrangement and the Amended Arrangement Agreement. Any statements contained herein that are not statements of historical facts are forward-looking statements. The completion of the proposed transaction pursuant to the Amended Arrangement Agreement is subject to a number of terms and conditions, including, without limitation: (i) receipt of required shareholder approval, (ii) receipt of necessary court approvals, and (iii) certain termination rights available to the parties under the Amended Arrangement Agreement. These approvals may not be obtained, the other conditions to the transaction may not be satisfied in accordance with their terms, and/or the parties to the Amended Arrangement Agreement may exercise their termination rights, in which case the proposed transaction could be modified, restructured or terminated, as applicable.  Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with a transaction, that the ultimate terms of the transaction will differ from those that are currently contemplated, and that the transaction will not be successfully completed for any reason (including the failure to obtain any required approvals). Sandvine does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Any forward-looking statements are made as of the date hereof and, except as required by law, Sandvine assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

UPDATED : 2017-07-06 16:28:40