MISSISSAUGA, Ontario--(BUSINESS WIRE)--Sep. 20, 2018--
Covalon Technologies Ltd. (the "Company" or "Covalon") (TSXV: COV.V;
OTCQX: CVALF), an advanced medical technologies company, today announces
that it has entered into a definitive agreement to acquire AquaGuard,
the Seattle, Washington-based division of medical technologies company
Cenorin, LLC. AquaGuard’s specialized products provide patients with
crucial moisture protection for wound, surgical, and vascular access
sites throughout the body while showering.
Brian Pedlar, Chief Executive Officer of Covalon, said, “I am very
excited about this acquisition – AquaGuard’s experienced sales team and
specialized product line are a perfect synergistic fit for Covalon’s
business. AquaGuard’s talented sales team has built strong relationships
with clinicians and hospital staff throughout the United States that
make decisions on the very same products Covalon makes – vascular access
dressings, surgical site management products, and advanced wound care
Gerry Arambula, President of AquaGuard, stated, “The AquaGuard sales and
operations teams are very excited about joining forces with Covalon. Our
AquaGuard team has built a profitable and growing business that is
well-positioned to represent and sell many of Covalon’s infection
management products, such as IV Clear, immediately into our customer
base. We are looking forward to working with the Covalon team to
transform Covalon’s business in the United States. Products will be made
available through AquaGuard’s established distribution channels at key
hospitals and group purchasing organizations across the United States,
as well as through third-party distribution partners, including Amazon.”
Gerry Arambula and existing AquaGuard leadership will continue to play
key roles in leading the business going forward. Following the closing
of the transaction, Covalon will have in the United States a customer
base of over 1,500 hospitals and clinics. Covalon also anticipates an
opportunity to sell AquaGuard’s products through Covalon’s international
Under the terms of the definitive agreement, Covalon will acquire all of
the assets and staff dedicated to the AquaGuard business from Cenorin,
LLC. Covalon anticipates the transaction will close in less than sixty
days and is subject to customary closing conditions and TSX Venture
Exchange and lender approval. The consideration of $16.1 million(US$12,375,000) is comprised of the following:
$4.7 million(US$3,617,392) in cash on closing
$0.65 million(US$500,000) of shares of Covalon issued on closing and
held in escrow for up to two years
$3.32 million(US$2,552,300) payable 12 months from the closing date
$6.5 million(US$5,000,000) payable 24 months from closing date
$0.92 million(US$705,308) of assumed liabilities payable to
management and key staff of AquaGuard by issuance of shares of Covalon
In addition, there is potential contingent consideration of up to
$1.17 million(US$900,000) payable upon achievement of certain revenue
targets by December 31, 2018.
During its last fiscal year ended December 31, 2017, the AquaGuard
business recorded $11.1 million (US$8.5 million) in revenue and $683,000(US$526,000) in profit before taxes.
Covalon’s Board of Directors unanimously approved entering into the
agreement. Acting as financial and legal advisors to Covalon are
Morrison Park Advisors, and Stikeman Elliott LLP, respectively.
AquaGuard is a United States-based medical technology business that
specializes in infection protection products that protect surgical
incisions, intravenous (IV) sites, catheters, PICC lines, and other
dressings from water and other moisture while a patient showers.
AquaGuard’s family of products provide protection for sites and
dressings all over the body, and can be applied by most patients without
the need of assistance from medical professionals.
Covalon Technologies Ltd. researches, develops, and commercializes new
healthcare technologies that help save lives around the world. Covalon's
patented technologies, products, and services address the advanced
healthcare needs of medical device companies, healthcare providers, and
individual consumers. Covalon's technologies are used to prevent,
detect, and manage medical conditions in specialty areas such as
infection control, vascular access, surgical procedures, advanced wound
care, and medical device coatings. To learn more about Covalon, visit
our website at www.covalon.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking statements which reflect
the Company's current expectations regarding future events. The
forward-looking statements are often, but not always, identified by the
use of words such as "seek", "anticipate", "plan, "estimate", "expect",
"intend" and statements that an event or result "may", "will", "should",
"could" or "might" occur or be achieved and other similar expressions.
These forward-looking statements involve risk and uncertainties,
including completion of the AquaGuard acquisition, the difficulty in
predicting product approvals, acceptance of and demands for new
products, the impact of the products and pricing strategies of
competitors, delays in developing and launching new products, the
regulatory environment, fluctuations in operating results and other
risks, any of which could cause results, performance, or achievements to
differ materially from the results discussed or implied in the
forward-looking statements. Many risks are inherent in the industry;
others are more specific to the Company. Investors should consult the
Company's ongoing quarterly filings for additional information on risks
and uncertainties relating to these forward-looking statements.
Investors should not place undue reliance on any forward-looking
statements. The Company assumes no obligation to update or alter any
forward-looking statements whether as a result of new information,
further events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180920005161/en/
Source: Covalon Technologies Ltd.
Covalon Technologies Ltd.
Brian Pedlar, 905-568-8400 x 233
Covalon Technologies Ltd.