Cyan plans to issue $50 million of five-year convertibles, warrants

Offering via Jefferies includes $10 million greenshoe

By Rebecca Melvin

New York, Dec. 3 – Cyan Inc. plans to price $50 million of five-year convertible senior notes and related warrants under Regulation D.

There is a $10 million greenshoe on the notes that are being sold via Jefferies & Co.

Timing and pricing details were not immediately available.

The warrants will be exercisable on Jan. 15, 2016 and expire on Dec. 15, 2017.

The notes are non-callable until Dec. 20, 2017 and then are provisionally callable if shares exceed 140% of the conversion price for 20 out of 30 trading days. They are convertible after Jan. 15, 2016.

There is takeover protection under which holders may require the company to purchase all or any portion of their notes for cash equal to the principal amount of the notes plus interest.

Certain existing shareholders and officers have expressed an interest in purchasing about $15 million of the notes and warrants.

About $3.8 million of the proceeds will be used to repay amounts outstanding under the company’s existing credit facility. In addition, the company will deposit into escrow funds sufficient for the first six scheduled semiannual interest payments on the notes.

Remaining proceeds are earmarked for general corporate purposes, including for working capital and capital expenditures.

Petaluma, Calif.-based Cyan is a networking solutions provider.

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