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Cyan to acquire Connode to expand global reach and portfolio

Cyan (AIM:CYAN.L), the integrated system and software design company delivering mesh based flexible wireless solutions for utility metering and lighting control, announces its intention to acquire standards-based software company Connode, subject to shareholder approval.

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*. As well as being successful in developed markets, Connode has recently partnered with a large Indian energy company, to build a smart sustainable city network pilot. In the first pilot project, smart meters, streetlights and distribution automation equipment will be connected using IoT Gateways and Connode’s IPv6 based wireless solution. This will be the first pilot installation 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.