Cogentix Medical agreed on Wednesday to sell a 27 percent stake in company stock—valued at $25 million—to Accelmed Growth Partners, a medical industry investor based in New York and Israel.
 
Cogentix, which manufactures and sells urology products to treat conditions like an overactive bladder, will sell its shares to Accelmed at a 29 percent premium over its Tuesday closing price of $1.20.
 
“Overall, the proposed transactions significantly increase our cash resources, eliminate all of our outstanding debt and dramatically improve our capital structure,” said Darin Hammers, president and CEO of Cogentix, in a statement.
 
The $25 million Coentix is receiving will be used to eliminate a $29.5 million sum of debt the Minnetonka-based company owed to its board member Lewis Pell. Pell will be paid back in stock.
 
In May, Pell won control over Cogentix following a C-suite battle that resulted in the resignation of Robert Kill, the company’s former CEO. Two other board members also stepped down and the company incurred a $2.1 million settlement charge related to the proxy war.
 
Pell and the remaining board members then promoted Hammers from chief operating officer to head of the company. As for the two board openings, the company’s board at the time said it would “use [its] best efforts to nominate and elect two new outside, independent directors.”
 
The first of Cogentix’s new directors, the company said Wednesday, will be Uri Geiger, the co-founder of Accelmed.
 
“We have admired the revenue growth of Cogentix Medical under the leadership of Darin [Hammers] and his team,” Geiger said in prepared remarks. He added that with financial assistance and a well-planned business development strategy, the company “could expand into being one of the leaders in the urology marketplace.”
 
Cogentix did not provide its second board member pick, nor did it specify a date as to when it would.
 
Ultimately, the company said the $25 million infusion would go toward a stock buy-back that would effectively leave Pell with a 33 percent ownership of the company. Accelmed would own 27 percent.