|Cyan Announces Pending Acquisition by Ciena; Releases First Quarter 2015 Financial Results|
Cyan Inc.3 hours ago
PETALUMA, Calif.--(BUSINESS WIRE)--
Cyan Inc. ( CYNI), a leading provider of SDN, NFV, and packet-optical solutions for network operators, today announced it has entered into a definitive agreement to be acquired by Ciena ( CIEN) for an aggregate purchase price of approximately $400 million (or approximately $335 million net of cash). Cyan also announced financial results for its first quarter ended March 31, 2015.
Upon the closing of the transaction, Cyan shareholders will receive consideration equal to the value 0.224 shares of Ciena common stock (89% of which will be delivered in Ciena common stock and 11% will be delivered in cash based on the value of Ciena common stock at closing), as described more completely in the press release that is available on Ciena’s web site ( www.ciena.com). This exchange ratio represents approximately $4.75 per share of Cyan common stock, based on Ciena’s 20-day volume weighted average price as of May 1, 2015. Based on the closing price of Cyan’s stock of $3.65 on May 1, 2015, this reference price represents a premium of approximately 30%. Based on the structure of the transaction, Cyan’s outstanding warrants will be deemed to have been automatically exercised upon closing. In addition, Ciena will also assume Cyan’s outstanding equity awards.
“Since launching the first Z-Series packet-optical products in 2009, Cyan has introduced the world’s first integrated packet-optical platform, the world’s first deployment ready multi-vendor SDN controller and NFV orchestrator, and the world’s first disaggregated “bright box” optical system. Innovation is core to our business, and our innovation has always been focused on helping customers transform their networks. Joining forces with Ciena, another clear innovator in the networking space, will accelerate this transformation. Together, we will provide our customers with the technologies they demand for a software-controlled operational model, orchestrating services on top of a scalable network, with the ability to rapidly create revenue streams in the new virtualized, on-demand world. This combination enables greater monetization for network operators through more efficient utilization of network assets and faster time-to-market with differentiated and profitable services,” said Mark Floyd, chairman and chief executive officer, Cyan.
“After careful consideration and a comprehensive evaluation of strategic alternatives, our board of directors concluded that the opportunity to combine with Ciena represents the best possible outcome for shareholder value. The transaction has many strategic merits and the stock consideration allows shareholders to participate in potential future combination benefits. Our board of directors believes that being part of a larger, global platform enables the combined company to execute on Cyan's business more effectively and provides significant value to our customers and shareholders,” continued Floyd.
The Cyan board of directors has unanimously approved the transaction, which is expected to close in the third quarter, subject to Cyan stockholder approval and other customary closing conditions. Certain officers and directors and affiliated stockholders, including investment funds affiliated with certain directors, collectively holding over 40% of the outstanding shares of Cyan, have signed voting agreements committing to support the merger. Jefferies LLC is serving as financial advisor to Cyan. Houlihan Lokey Capital, Inc. also provided financial advice to the Cyan board. Wilson Sonsini Goodrich & Rosati is serving as legal counsel to Cyan.
Cyan First Quarter 2015 Financial Results
Cyan also is announcing its results for the first quarter of 2015. Revenue for the first quarter of 2015 grew to $36.0 million, up 89 percent when compared with $19.0 million in the first quarter of 2014 and up 18 percent when compared with $30.5 million for the fourth quarter of 2014.
GAAP net loss for the first quarter was $52.9 million, or $1.11 per share, compared to a net loss of $17.8 million, or $0.38 per share, in the same period last year and a net loss of $15.0 million, or $0.32 per share, in the fourth quarter of 2014. The first quarter 2015 GAAP net loss includes a $41.3 million non-cash charge for the change in fair value of warrant and derivative liabilities associated with our convertible debt, which was primarily the result of a 60 percent increase in the company’s stock price during the quarter.
On a non-GAAP basis, Cyan's net loss for the first quarter was $6.8 million, or $0.14 per share. This compares to a non-GAAP net loss of $15.3 million, or $0.33 per share, in the same period last year and a non-GAAP net loss of $7.1 million, or $0.15 per share, in the fourth quarter of 2014. Both GAAP and non-GAAP net loss per share figures for the first quarter of 2015 are based on 47.8 million basic weighted average shares outstanding.