Sandvine Corporation et al., CCAA

Sandvine Corporation et al., an application and network optimization company headquartered in Waterloo, Ontario, obtained CCAA protection on November 7.

The company operates in over 50 countries and has approximately 500 employees and contractors. It provides quality of experience analysis and performance optimization software applications to its customers, the majority of whom are telecommunications service providers, allowing customers to understand the app traffic flowing in their networks with significantly higher accuracy compared to other products on the market.

In February 2024, Sandvine was designated on the US Department of Commerce’s Entity List, which restricted its ability to procure the hardware, software, and technology critical to its core business operations. In response to the designation, Sandvine has exited over 30 countries and is in the process of exiting over 20 more that it has deemed as non-democratic countries or countries where the threat to digital rights is too high.

Sandvine was removed from the Entity List in October 2024, but its business has been materially impacted by the designation, since the countries that Sandvine has exited and is in the process of exiting represent approximately 45% of Sandvine’s 2023 revenue.

As a result, earlier this year, Sandvine negotiated a reorganization with its first and second lien lenders pursuant to which the lenders became the indirect owners of Sandvine and agreed to significantly reduce Sandvine’s debt (at that time over US$500 million) by approximately US$92 million.

Despite the reorganization, the company remained overleveraged and required additional funding, so Sandvine and the lenders negotiated a further financing and restructuring of the company, including a proposed debt to equity conversion transaction to be tested through a CCAA sale process and approximately US$125 million in new first lien financing.

Sandvine has sought recognition under Chapter 15 of the US Bankruptcy Code. 

KSV is the monitor.

Counsel is Osler (Canadian counsel) and Paul Weiss (US counsel) for Sandvine, Cassels for the monitor and Goodmans for the lenders. GLC Advisors is the financial advisor to the company.