Headquartered in Stockholm, Connode is a leading supplier of wireless communication products for IoT and has successfully deployed over 650,000 legacy units with utilities. Connode provides a standards-based IPv6 6LoWPAN solution for developed markets in Europe and Asia including a £25m software license and support contract for the UK smart meter rollout to provide the radio network for households where there is no cellular network coverage.
The UK Government has identified smart meters as key energy efficiency technology and is aiming for approximately 53 million smart meters to be installed in 30 million homes and businesses in the UK by 2020* (1). As well as being successful in developed markets Connode has recently partnered with Reliance Energy, part of Reliance Industries Limited the Indian conglomerate with over 6.4 million customers, to build a smart sustainable city network pilot in Mumbai. In the first pilot project, smart meters, streetlights and distribution automation equipment will be connected using Intel® IoT Gateways and Connode’s IPv6 based wireless solution. This will be the first rollout in India of smart meters fully compliant with the communication standards recently adopted in the machine-to-machine roadmap by the government of India.
The acquisition of Connode will accelerate Cyan’s product roadmap with the addition of IPv6 6LoWPAN, expand Cyan’s geographic coverage from the major emerging markets (including India, Iran, Africa and China) to developed markets (including Europe and other western markets, potentially North America) and allow the combined company to become the world number one in narrowband mesh networks. The combined company will support multi-application networks and enable communication with any device including gas, water and electricity meters, lighting and traffic lights.
John Cronin, Executive Chairman of Cyan commented: “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. The acquisition of Connode will be 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 (IoT) and smart cities.”
Bjorn Lindblom, Chief Executive Officer of Connode, commented: “This change in ownership will help us to further boost the global sales of our mature IoT platform. The combined entities will be a market leader in dedicated IoT communications networks with the resources needed to continue our global expansion. Connode has a unique position as a proven supplier of highly scalable, easy to deploy, IPv6 6LoWPAN based, wireless Neighbourhood Area Networks. It is a great opportunity to broaden the scope of work for both technical and commercial staff.”
Cyan currently focusses on smart metering and lighting in emerging markets that have a pressing requirement to reduce energy losses and improve revenue assurance. The company partners worldwide with utilities, system integrators and meter manufacturers to create global ecosystems that deliver significant benefits for energy providers, consumers and the environment. Cyan uses a proprietary communication platform which is optimised for exceptional performance at an affordable price. The low power solution uses compressed data over narrowband frequencies, which provides reliable, long range communications as well as a self-forming and self-healing mesh network to ensure resilience.
The acquisition is subject to shareholder approval to be sought at a general meeting of the company to be held on 30 June 2016.
(1) https://www.smartenergygb.org/en/the-bigger-picture/about-the-rollout
£12.6 million Placing, Subscription and Acquisition of Connode, Director Dealings and Notice of General Meeting
- Acquisition of Connode Holding AB, a well-established supplier of wireless communication solutions for smart metering and the Internet of Things (“IoT”) with customers in the UK, Europe and Asia for a consideration of £6.8 million, consisting of £4.3 million in cash and £2.5 million in equity consideration. The £12.6 million transaction value consists of the £10.1 million Placing and Subscription and the £2.5 million equity consideration
- Connode is a key supplier of mesh technology to the UK Smart Metering Implementation Programme. The potential value of the SMIP rollout to Connode is approximately £37 million in software licence and support fees over the rollout and support lifecycle
- Cash consideration will be financed through an equity fund raise of £10.1 million consisting of a Placing of 4,341,777,600 Ordinary Shares (“Placing Shares”) and a Subscription of 1,280,277,650 Ordinary Shares (“Subscription Shares”) at a price of 0.18 pence per share
- Biggles Enterprises Limited, part of the J. S. Technical Services Company, Limited group of companies (“JST”) in Thailand (with whom the Company signed a distribution agreement in May 2016) has agreed to make a strategic investment of £2 million as part of the Subscription
- As part of the fundraise, all the Directors of Cyan are investing alongside certain senior managers and a consultant for a total of £304,500 as part of the Subscription
- Directors and certain senior managers have also agreed that, in the interests of retaining cash within the Company, they will receive all of their net income and bonuses earned during the period from July 2016 to June 2017 as shares issued at the issue price, which will represent an incremental equity investment of £729,904
About Cyan
Cyan (AIM:CYAN.L) provides a communication platform for energy, lighting and emerging applications in the wider ‘Internet of Things’ network. Its integrated platform and partner collaborations deliver end-to-end solutions that connect millions of devices and support bidirectional communication with the end customer. Cyan’s smart metering and lighting solutions enhance quality of service in emerging regions, through power savings, lower operating costs and increased cost efficiency. Cyan’s vision to create improved value through Smart City solutions has provided its customers with the foundation upon which to build incremental services as these markets evolve.
For more information, please visit www.cyantechnology.com
About Connode
Connode, headquartered in Stockholm Sweden, is the leading supplier of wireless communication products for the Internet of Things. Connode wireless technology is the result of 10 years development of large-scale wireless mesh networks. Since 2006 utilities and telecom operators have deployed Connode-enabled devices in large-scale projects in Europe, Middle East and Asia. Connode is a key supplier of mesh technology to the UK Smart Metering Programme.
For more information, please visit www.connode.com
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Enquiries:
Cyan Holdings plc
Tel: +44 (0) 1954 234 400
John Cronin, Executive Chairman
www.cyantechnology.com
Milner Strategic Marketing Ltd
Chloe Purcell
Tel: +44 (0)1473 633123
[email protected]
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