Deal Brief Healthcare - Covalon Technologies

Deal Highlights

• The acquisition combines Covalon’s rich technology portfolio with AquaGuard’s excellent products and  specialized salesforce, who will provide selling capabilities for and access to, the United States healthcare market; the largest healthcare market in the world.
• Covalon researches, develops and commercializes new healthcare technologies that help save lives around the world. AquaGuard is a medical technology business that specializes in infection protection products that protect surgical incisions, IV sites, catheters, PICC lines, and other dressings from water and other moisture while a patient showers. 
• Future opportunities for Covalon lie in additional medical device technology companies; providing bolt-on opportunities in the infection control and management, surgical, vascular access and wound care markets.

Market Outlook

• Buyers will continue to look for scalable prospects rich in intellectual property, profitable distribution channels and massive total addressable markets (TAMs). 
• Opportunities will also arise as buyers continue to look at scaling their existing platforms, technology, IP, distribution channels and call points, with scalable, profitable and accretive acquisitions. 
• Advanced medical device technology companies are a target rich environment that can provide plenty of M&A opportunities on both the buy and sell side. 

Valuation Summary 

• Total deal value of $12.4 million. 
• Potential for contingent consideration of up to $0.9 million. 
• Fiscal year-ended December 31, 2017 revenues of $8.5 million. 
• Implied total deal value to revenue of between 1.5x and 1.6x.

IMAP Approach

• IMAP has closed 50 transactions in the Healthcare sector since 2015 
• IMAP Canada not only provides its clients with access to a greater universe of targets across the globe, it consistently delivers battle-tested valuation advice and deal-making expertise. 
• With its considerable experience in advising Advanced Medical Devices Companies, IMAP Canada ensured the acquisition process was smooth and the outcome successful. 
• With its expertise in recognizing opportunities in new markets, IMAP continues to invest in relationships with potential targets and buyers.