Cogentix Buys British Business Partner Genesis Medical
Urology and gynecology device maker Cogentix Medical Inc. has acquired Genesis Medical, a privately held London-based company and business partner of Cogentix since 2013.
Darin Hammers, the chief executive of Minnetonka-based Cogentix, hinted at the deal about a week ago when the company announced an exclusive licensing agreement with Monaco-based medical device manufacturer Promepla. At the forefront of that arrangement, Hammers said, would be the U.S. launch of a full suite of Cogentix-branded products, including ureteral access sheaths, gravity irrigation lines, nitinol guide wires and other devices used to treat the male and female urinary systems.
“In addition, the structure of the license agreement … means that we continue to have $27 million in cash and investments for additional business development opportunities,” Hammers noted. “We expect to complete at least one more transaction in the near term.”
That transaction was for Genesis.
With Genesis, Cogentix assumes control of the U.K. sales and marketing arm for its PrimeSight endoscopy system. PrimeSight, a laptop-shaped device with flexible or rigid video “scope” attachments, has seen considerable sales growth in recent quarters.
In May, during Cogentix’s first quarter report, PrimeSight urology products recorded a 45 percent year-over-year rise in sales, leading the company’s revenue growth and pushing its core urology product group to see an 11 percent sales gain overall.
“We believe that during the second half of this year our urology products revenue growth rate will exceed the first half’s 11 percent,” Hammers said, “and Genesis will contribute to this acceleration.”
Cogentix is forecasting a positive gain of $800,000 from the deal by the end of the year. Over the course of 2018, Cogentix expects the impact to be more than $2 million of incremental revenue.
In its last fiscal year, Genesis was profitable and generated upwards of $3 million in revenue.
“Genesis has been our highly productive PrimeSight partner in the U.K. for the past four years,” Hammers said, “and they have exceptionally strong customer relationships in the British urology market.”
On top of buying all tangible assets of Genesis, Cogentix agreed to pay up to $671,560 (or GBP £515,000) if the British company hits certain revenue milestones through March 2019.