For the second time in recent weeks, the stage has been set for a Canadian technology company operating in an area that’s sensitive to human rights, to be acquired by a foreign buyer.

Sandvine Corp., which defines itself as “the leader in network policy control,” is the latest in this situation. This week it received a $4.15 a share offer from Francisco Partners. One month back, it agreed to a $3.80 a share offer from Vector Capital, another private equity firm.

Sandvine found Francisco Partners during a “go-shop” period. Vector has until the middle of next week to match Francisco’s offer.

This past week, controversy surrounded another transaction that recently closed: the takeover of Norsat International, a Canadian satellite technology company, by Chinese buyer Hytera Communications Co. Concerns had been expressed that national security, both here and abroad could be at risk, if the deal went through. While Canada gave the green light, the Pentagon indicated it would be reviewing contracts it had with Norsat.

Back to Francisco Partners. If nothing else it is controversial, in large part because of the alleged activities of its two subsidiaries — U.S.-based Procera Networks and the Israeli-based cybersecurity company NSO Group.

And given those alleged activities there is the risk that if Sandvine ends up with the wrong owner there could be the potential for human rights abuses.

Procera is in the news because it has been accused of providing software to the Turkish government that allowed it to spy on its own citizens. (The product in question allows for “deep packet inspection,” or the monitoring of network traffic.) Forbes has written extensively on those allegations, which came to life when a former employee resigned.

In that Forbes article, Procera declined to discuss specific deals but said that it “strongly supports core principles of human rights and dignity for people around the world.” In that same article, Francisco also rejected the allegations.

NSO is in the news because of the way its products have allegedly been used in Mexico. There have been at least two articles in The New York Times, and Michael Flynn, the former national security adviser to U.S. president Trump, has worked for NSO.

Some of the reporting about NSO was based on work done by the Citizen Lab at the Munk School of Global Affairs at the University of Toronto. That lab researches digital security issues that arise out of human rights concerns — in other words, the intersection of cyber espionage and civil society.

Two weeks back it issued a report indicating three senior Mexican politicians “were targeted with infection attempts using spyware developed by the NSO group.” Earlier reports have shown that Mexican journalists, lawyers, scientists, and public health campaigners had been targeted using NSO’s exploit framework.

Ronald Deibert, the Lab’s director said there is a spectrum around deep packet inspection from the “innocuous” at one end to “mass and targeted surveillance” at the other. It depends on who is using it and what controls there might be on how it’s used,” he added.

As for the takeover, if Sandvine is to be purchased by Francisco Partners, “which has a track record of going after this (the non-innocuous) marketplace then Sandvine could be steered in that direction. That, to me would justify closer scrutiny by the government,” said Deibert. “My concern is that Sandvine would be drawn into this orbit, of the shady underworld of state espionage. That would put a black mark on Canada’s reputation.”

A message left with Francisco Partners seeking a comment was not returned. We were unsuccessful in reaching Sandvine.

Financial Post

bcritchley@postmedia.com