The global surge in the telecom market has prompted Ciena Corporation (NYSE:CIEN) to expand its operations and market reach. As per the reports, the company has decided to purchase Cyan Inc (NYSE:CYNI) in a cash plus stock deal worth as much as $400 million.
What’s In There For Shareholders:
Ciena is known for making fiber-optic equipment that are used in networking while Cyan is famous for providing software and platforms to various network operators located in different parts of the world. Under the terms of this deal, all the shareholders of Cyan will get a consideration that will be equal to 0.224 shares of Ciena shares. As per the reports, 11% of the total consideration will be offered in the form of cash while 89% of it will be delivered in the form of Ciena shares.
If taken into consideration the closing price of Ciena on Friday, this offer is worth $4.77 per share, close to 31% premium on the last closing price of Cyan. On the basis of the total cash involved in the transaction, it is valued at around $335 million.
Amidst of all this excitement, Cyan has reported its financial performance for the previous year. The revenues of the company touched a magical $36 million figure, up 89% on YOY basis. The net loss of the company for the previous quarter was $1.11 per share or $52.2 million as compared to the previous year’s loss of 38 cents a share or $17.8 million in total.
If a few terms are ignored, the per share loss of the company reduced to 14 cents from 33 cents in the previous year. March 2015 wasn’t one of the best months for Ciena as the timing of most of its orders was not right. Moreover, the foreign exchange rate also created problems for the company and led it to a wider loss and below expected revenues. The management of Ciena Corporation (NYSE:CIEN) hopes to enjoy favorable time in the future after the execution of the current deal.