14th Jun 2016 07:46
LONDON (Alliance News) - Cyan Holdings PLC on Tuesday said it agreed to buy Connode Holding AB for GBP6.8 million, to be partly funded through a share placing and subscription.
Connode Holding is a Sweden-based supplier of wireless technology for smart metering and Internet of Things applications, with customers in the UK, Europe and Asia.
Cyan, which designs mesh-based flexible wireless products used for utility metering and lighting control, said the consideration for Connode is GBP6.8 million, consisting of GBP4.3 million in cash and GBP2.5 million in new Cyan shares totalling 14.03 billion.
Cyan said it will fund the acquisition through a share placing and subscription, placing 4.34 billion shares and offering a further 1.28 billion shares for subscription, at a price of 0.18 pence per share. If completed, this will raise GBP10.1 million, before the deduction of fees and expenses, Cyan said. However, both the share placing and subscription are conditional upon the passing of resolutions at a general meeting on June 30.
Shares in Cyan were down 12% at 0.185p on Tuesday morning.
Cantor Fitzgerald and Beaufort have conditionally agreed to place all of the placing shares.
As part of the fundraise, Biggles Enterprises Ltd, part of the J. S. Technical Services Co Ltd, and with whom Cyan signed a distribution agreement in May, has agreed to make a strategic investment of GBP2.0 million, subscribing for 1.11 billion of the subscription shares.
The other subscribers comprise all of the directors, certain senior management and a consultant of Cyan, who are in total subscribing for 169.2 million shares for GBP300,000.
These include Executive Chairman John Cronin, who is subscribing for 18.6 million shares, and will have a 1.26% stake following the share placing, down from the 2.24% stake held before the placing.
Chief Financial Officer Simon Smith also will subscribe for 18.6 million shares, and following the placing will hold 0.89% of issued share capital.
Non-Executive Director John Read will subscribe for 5.6 million shares and will hold a 0.31% stake in Cyan after the share placing.
Non-Executive Director Harry Berry will take 16.7 million shares to hold a 0.33% stake after the placing completes.
Non-Executive Director Paul Ratcliff will subscribe for 2.8 million shares, in his first share transaction with Cyan and will hold 0.02% in Cyan following the paling.
Cyan said the additional funds from the placing and subscription will be used for working capital.
"As our clients in developing markets realise the benefits from our proprietary end-to-end solutions, we believe that they will want to converge their networks and this will require standards-based technologies. Convergent networks require a standards-based core language to enable the rapid development integration and consolidation of applications," said Cronin.
"The acquisition of Connode is transformational for Cyan, and will give us the capability to build these functions into our core products, enabling us to future proof our customer solutions and provide standards-based interfaces for additional connectivity as required for the Internet of Things and smart cities," Cronin added.
By Hannah Boland; [email protected]; @Hannaheboland
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