Accelmed’s control strategy is best illustrated through AP-I’s investment in Cogentix (NASDAQ: CGNT). At the time of Accelmed’s investment, Cogentix offered three legacy product lines developed more than a decade prior and had sales of approximately $40m which were essentially flat. It faced competition from larger players such as Medtronic and had a significant debt burden ($29m).
Accelmed invested $25m in Cogentix in November 2016 and gained control over the company together with Mr. Lew Pell, who converted his $29m of debt into equity. At the time of investment, Cogentix’s market cap was $32m. Accelmed’s Managing Partner, Dr. Uri Geiger, became the Chairman of the company and a new CEO (Darrin Hammers) was nominated. In a little more than a year, Accelmed successfully partnered with management to focus the company on its Urology product line, transforming Cogentix into a dynamic, high-growth company, achieving 18% annual growth through both organic investment in S&M and three opportunistic add-on transactions.
Cogentix’s share price more than tripled in the 15 months following the announcement of Accelmed’s investment. In March 2018, Cogentix was acquired by Laborie for $240m in cash.