Cogentix Medical is facing an investigation regarding potential legal claims against its board. Laborie Medical Technologies intends to acquire the company.
While it was announced that privately-held Laborie Medical Technologies intends to acquire Cogentix Medical (NASDAQ:CGNT), legal investigations have been announced by several law firms regarding potential legal claims against the company’s board of directors.
The initial acquisition was announced on Monday (March 12) stating that Laborie will acquire all of the issued and outstanding shares of Cogentix for approximately $239 million.
By Wednesday (March 14), however two legal firms announced investigations into the acquisition. Levi & Korsinsky, LLP announced the legal investigation on the fairness of the sale of Cogentix for the benefit of investors.
“The investigation concerns whether the Board of Cogentix Medical breached their fiduciary duties to stockholders by failing to adequately shop the Company before agreeing to enter into this transaction, and whether LABORIE Medical Technologies is underpaying for Cogentix Medical shares, thus unlawfully harming Cogentix Medical shareholders,” the statement read.
Similarly, Rigrodsky & Long, P.A announced the investigation, stating ”regarding possible breaches of fiduciary duties and other violations of law related to the company’s entry into an agreement to be acquired by Laborie Medical Technologies.”
Darin Hammers, president and CEO of Cogentix Medical said in its initial statement that the company thinks the transaction is 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 is a medical device company whose products include a neuromodulation system for overactive bladder, and a device for endoscopy imaging. In the press release Cogentix announced it will no longer issue a statement for its Q4 and fiscal 2017 year.
Laborie also develops medical devices focusing on gastrointestinal procedures, the diagnosis and treatment of pelvic health in urology, gynecology and colorectal.
As of the time of this writing, neither company has issued a statement regarding the potential investigation into the acquisition. Over a one-day period, shares of Cogentix dipped slightly by 0.13 percent to close at $3.83 on Wednesday, while after hours trading brought its share price down by 0.26 percent to $3.82 as of 5:57 p.m. EST.
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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.