Cyan Holdings buys Connode for £6.8m

Cyan Holdings, a British integrated system and software design company, has bought Connode, a Swedish supplier of wireless communication products, for £6.8m.

The sale will be partly funded through a share placing and a subscription. The £6.8m sale of Connode consists of £4.3m in cash and £2.5m in equity consideration.

More than 4.3bn ordinary shares will placed and a subscription of over 1.2bn ordinary shares will be set at 0.18p per share. If completed this will raise £10.1m, before fees and expenses.

The subscription and share placing sale is unconfirmed until a resolution is passed at a general meeting on 30 June in Cambridge.

Biggles Enterprises, part of JS Technical Serviced Company in Thailand, has agreed to invest £2m as part of the subscription. The company signed a distribution agreement with Cyan Holdings in May 2016.

To fundraise as part of the subscription Cyan directors, some senior mangers and a consultant invested £304,500. They also agreed to receive all their net income and bonuses from July 2016 to June 2017 as shares at the issue price. This represents an incremental equity investment of £729,904.

The Cyan directors believe Connode brings an opportunity to acquire a business with complementary products and make new territorial grounds. Connode sells products to Europe and Asia and could potentially open up the US market.

Executive chairman of Cyan John Cronin said: “Convergent networks require a standards-based core language to enable the rapid development integration and consolidation of applications.

“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."