Through the deal, Accelmed will buy $25 million in Cogentix Medical common stock at $1.55 per share. Funds are slated to support working capital and to implement a business development strategy to acquire growth tech which addresses the urology market.
“The proposed transaction with Accelmed has the ability to transform Cogentix Medical. While our team has been successfully executing our sales strategy and building our business in the urology market, we have been resource constrained in terms of providing our sales organization with additional products to bring to our growing customer base. Accelmed is one of the world’s leading private equity firms focused on the medical device industry, and as Israel’s largest med-tech investor, has a proven track record of integrating Israeli technologies into established US med-tech companies. Accelmed believes the Cogentix platform provides an excellent foundation from which to build a broad based leader providing innovative, cost effective and clinically proven solutions to the growing urology marketplace. Overall, the proposed transactions significantly increase our cash resources, eliminate all of our outstanding debt and dramatically improve our capital structure, all at valuations that are 29% higher than what the market is currently awarding our company,” CEO Darin Hammers said in a press release.
As part of the funding transaction, Accelmed will nominate 2 members to Cogentix’s medical board of directors, including Accelmed director Uri Geiger, who is set to become board chair.
“We have admired the revenue growth of Cogentix Medical under the leadership of Darin and his team, and believe that with the appropriate resources and a well-planned business development strategy, Cogentix could expand into being one of the leaders in the urology marketplace. As a reflection of our confidence in the management team as well as the potential for the company, we have agreed to make this investment at a premium to the current market price and look forward to working with the board and management to execute on a shared vision for Cogentix,” Accelmed director and new Cogentix board chair Geiger said in prepared remarks.
Cognetix said it will convert $29.5 million in outstanding debt and accrued interest owed to class I director Lewis Pell to common stock at $1.67 per share.
In May, Cogentix said it entered into a settlement agreement as a result of a proxy war through which its current board chair and CEO Robert Kill will resign, with COO Darin Hammers taking over as interim CEO.
Along with Kill’s resignation, board directors Kevin Roche and Ken Paulus will also step down, with Lewis Pell and James D’Orta joining the board.
As part of the settlement agreement, the Minneapolis, Minn.-based company said its board will “use best efforts” to nominate 2 new outside, independent directors for its board.
The post Cogentix lands $25m from Accelmed appeared first on MassDevice.
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