Cogentix Medical Agrees to $239M Merger Deal with Laborie Medical Technologies
Urology and gynecology device maker Cogentix Medical has entered into a merger agreement with Toronto-based Laborie Medical Technologies in a deal worth approximately $239 million.
Laborie, which manufactures and sells pelvic health and gastrointestinal equipment, said Monday a tender offer had been extended to Minnetonka-based Cogentix Medical to acquire all of its outstanding shares for $3.85 a piece in cash — a roughly 14 percent premium over its Friday closing price.
“Laborie has a track record of success in [the urology and gynecology] markets,” said Darin Hammers, president and CEO of Cogentix Medical, in a statement. “We believe that this transaction is also a compelling financial opportunity that delivers significant value to our investors who have supported our evolution to becoming a valued player in the urology market.”
Cogentix Medical’s path to a nearly quarter-of-a-billion sale was by no means easy. The company, originally known as Uroplasty Inc., was incorporated in the state of Minnesota in 1992. After a merger deal at the end of 2014 with New York-based Vision-Sciences Inc., the company — now known as Cogentix Medical — experienced a proxy fight in 2016 that ended with its then-CEO Robert Kill and two board members stepping down. The fight largely involved disagreements between Kill and another board member Lewis Pell, who owned a large share of the company.
Following the departures, the Nasdaq threatened to pull Cogentix Medical shares off the stock exchange for not having enough independent directors on its board. The company responded by essentially killing two birds with one stone. After selling a 27 percent stake in its business to medical industry investor Accelmed Growth Partners for $25 million, Cogentix Medical filled one of its two board vacancies with Accelmed’s co-founder Uri Geiger. Cogentix Medical then used that $25 million to help eliminate the debt it owed to investor Pell, while hiring on an additional board member from outside of the company.
Since then, Cogentix Medical has been on an upward swing by means of acquisition, branching out overseas, and through the rising demand for its products. Two of products in particular — its Urgent PC Neuromodulation device (used to treat bladder dysfunction) and its PrimeSight endoscopy device (used to look inside patients for digestive issues among other conditions) — regularly produced double-digit quarterly sales increases year-over-year.
Cogentix Medical finished its 2017 fiscal year with $56.3 million in revenue, according to a preliminary sales report.
Pell and Accelmed, which collectively own 60 percent of all Cogentix Medical shares, have already agreed to the Laborie’s tender offer for the company, effectively securing the deal.
“The acquisition of Cogentix advances our strategy to invest in leading technologies that provide product and channel scale of Laborie’s existing Urology Strategic Business Unit diagnostic and therapeutic portfolio, particularly in the areas of OAB (overactive bladder) and SUI (stress urinary incontinence),” said Michael Frazzette, president and CEO of Laborie, in prepared remarks.
Both companies expect the deal to close in the coming weeks.
Meanwhile, news of the deal sent Cogentix Medical shares up nearly 14 percent on Monday to $3.82 a piece.