Minnetonka medical device maker Cogentix Medical has agreed to be acquired by Canada-based Laborie Medical Technologies in a $239 million deal that would pay investors $3.85 per share.
The deal price represents a positive reversal for a Nasdaq-listed company that was valued at 71 cents per share amid a proxy contest just two years ago.
"The outcome is very good, and it's going to be great for [the Twin Cities] because they are going to keep the presence," said Lewis Pell, a longtime med-tech investor who is a director at Cogentix. The buyer is "a very large private equity firm with huge amounts of money behind them."
Laborie Medical, in Toronto, is a urology-health company owned by the Swedish investment firm Investor AB, whose other holdings include investments in AstraZeneca, Ericsson and Saab.
The deal price for Cogentix represents a 28 percent premium over Cogentix's average 30-day closing price, the companies said in the deal announcement. The acquisition is expected to close later this year.
Cogentix makes several products for the urology market, including the PrimeSight sterile endoscopy system, the in-office Urgent PC therapy for overactive bladder symptoms, and Macroplastique urethral bulking agent for stress urinary incontinence. Last year Cogentix began selling a line of minimally invasive endourology products that complement its existing product catalog.
Cogentix was formed in March 2015 through the combination of Minnesota-based Uroplasty and New York's Vision-Sciences, which was founded by Pell. That merger kicked off a rocky transition that cast the company's future into question. A $25 million infusion of private equity by Israel-based Accelmed and a related conversion of $29.5 million in debt held by Pell into equity in 2016 kept the company alive.
Since then Cogentix has been making strategic moves to bolster growth, including sales of a new line of endourology products.
"We are very pleased to be joining Laborie," Darin Hammers, Cogentix president and chief executive, said in a prepared statement. "We share a strong passion for providing novel solutions to our customers and their patients."
The deal is contingent on getting approval from the owners of 50 percent of the Cogentix shares, but Accelmed and Pell — who collectively own about 60 percent of the common shares — have already agreed to support the deal, the announcement said. Upon completion, the deal will convert all outstanding shares into the right to receive $3.85 per share in cash.
In trading Monday, Cogentix stock climbed more than 13 percent, to $3.82 per share. Analysts had projected that Cogentix would post about $65 million in revenue in 2018.
"This transaction helps us achieve our vision of creating value for our investors, patients and physicians in the urology and gynecology markets," Hammers said in the statement. "Laborie has a track record of success in these markets and we believe that the addition of our urology and gynecology assets to their existing product lines will ensure that our products are available to the many patients and physicians who may benefit from them."