Covalon Technologies announced on Thursday that it will acquire US-based AquaGuard, allowing its product reach in the country to expand.
This acquisition will allow Covalon’s products to be sold throughout the US by AquaGuard’s specialized salesforce, a division of Cenorin.
Under the agreement terms, Covalon will pay over US$12.3 million (C$16.1 million) to AcquaGuard’s business from Cenorin. The company expects the deal to close within 60 days, subject to all regulatory approvals. All of the directors from Covalon’s board have approved this agreement.
“AquaGuard’s experienced sales team and specialized product line are a perfect synergistic fit for Covalon’s business,” Covalon’s CEO, Brian Pedlar said in the press release. Covalon’s customer base includes over 1,500 hospitals and clinics in the US, but AquaGuard may expand this further in the country.
Pedlar explained AquaGuard’s sales team has already built relationships with hospitals and clinicians — which should result in a smooth transition moving the product line to Covalon. AquaGuard’s president, Gerry Arambula, said the company plans to sell Covalon’s products through third-party distribution partners, including Amazon (NASDAQ:AMZN) in addition to the current customer base.
On the other hand, Covalon will sell the products from the newly acquired company through its own international distribution channels.
AquaGuard has a line of specialty wound-covering products. The products’ moisture protection can cover a wound as well as surgical and vascular spots on the body while the patient is showering.
Covalon also has a line of wound care products. Its ColActive brand of Bio-Matrix dressings have helped head chronic wounds and prevented limb amputation in some cases. The company is looking to expand to markets with larger diabetic populations as many dressings are suitable for this market.
The existing AquaGuard leadership team will remain in prominent roles in the company going forward.
Patients can use AquaGuard’s products without the help of medical professionals, the variety of products have a use for all over the body. Aside from this division, Cenorin has two other divisions: HLD Systems and ThermaSure.
Covalon is based in Canada and, along with its wound care products, the company has products for infection prevention and multi-stage surgery care.
On the TSXV, Covalon’s share price increased 5.29 percent over Thursday’s trading period to close at C$9.16. As for the OTCQX, the company’s share price had a 4.72 percent increase to reach US$7.01 as of market close.
Investors looking for more information on this acquisition should expect to hear about it closing within the next few months. In terms of additional news, investors can follow both companies’ respective sites for updates on products and commercial updates.
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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.