8-KAcquisitions & DispositionsMaterial AgreementsFinancial Events+2

CIENA CORP 8-K Report, Material Agreement (Aug 3, 2015)

Filed August 3, 2015For Securities:CIEN

Summary

Ciena Corporation (CIEN) announced on August 3, 2015, the successful completion of its acquisition of Cyan, Inc. This was achieved through a merger agreement, where Cyan, Inc. merged with Ciena, ultimately becoming a wholly-owned subsidiary of Ciena. The acquisition was a significant event, involving the issuance of Ciena's common stock and a cash component to Cyan's shareholders, along with the assumption of Cyan's outstanding convertible senior secured notes. The primary financial impact for Ciena includes the issuance of approximately 10.6 million shares of its common stock and a cash payment of roughly $33.6 million. Additionally, Ciena assumed $50.0 million in aggregate principal amount of Cyan's 8.0% convertible senior secured notes, which will now be obligations of Ciena. The integration of Cyan is expected to bolster Ciena's offerings in the networking solutions space. Cyan's stock ceased trading on the NYSE following the merger's completion.

Key Highlights

  • 1Ciena Corporation has completed its acquisition of Cyan, Inc. through a merger, effective August 3, 2015.
  • 2The acquisition consideration included approximately 10.6 million shares of Ciena common stock and $33.6 million in cash paid to Cyan shareholders.
  • 3Ciena assumed $50.0 million in aggregate principal amount of Cyan's 8.0% convertible senior secured notes.
  • 4Cyan's common stock has been delisted from the New York Stock Exchange.
  • 5The merger is structured as a 'Make-Whole Fundamental Change' for Cyan's noteholders, potentially allowing for an increased conversion rate under certain conditions.
  • 6Ciena also assumed and substituted Cyan's outstanding equity awards with Ciena equity awards.

Frequently Asked Questions

The acquisition involved Ciena issuing approximately 10.6 million shares of its common stock and paying approximately $33.6 million in cash. In addition, Ciena assumed $50.0 million of Cyan's outstanding convertible senior secured notes.

Ciena assumed Cyan's $50.0 million in 8.0% convertible senior secured notes. The merger triggered a 'Make-Whole Fundamental Change' which, for a specified period, may allow noteholders to convert their notes into Ciena common stock and cash at an increased rate. Noteholders also have the option to require Ciena to purchase their notes for cash.

Cyan shareholders received merger consideration consisting of 0.19936 shares of Ciena common stock and $0.63 in cash for each share of Cyan common stock, plus cash for fractional shares. Shares of Cyan common stock ceased trading on the NYSE.

While not explicitly detailed in this 8-K, the acquisition of Cyan, a provider of networking solutions, is generally expected to enhance Ciena's product portfolio and market position in the telecommunications infrastructure sector.