BROOMFIELD – Corgenix Medical Corp. chief financial officer Bill Critchfield said Thursday morning that the company and its 48 employees will remain in Broomfield following the announcement that the diagnostic test kit maker has reached a deal to be acquired by Germany-based Orgentec Diagnostika.
The deal, valued at about $16 million, will see Corgenix shareholders receive 27 cents in cash for each share of common stock they own, a 29-percent premium to Corgenix’s average share price over the last 90 days of 21 cents. Corgenix (OTC QB: CONX.OB) will become a wholly-owned subsidiary of privately owned Orgentek and keep its own branding.
Corgenix shares were trading at 25.5 cents by early afternoon Thursday, down 25 percent from the previous day’s close of 34 cents.
“The Corgenix brand is very respected in our industry space, and this transaction provides excellent value to Corgenix shareholders,” Corgenix president and CEO Douglass Simpson said in a press release. “After a robust auction process and a thorough review of all alternatives, including staying as an independent company, the company’s board of directors strongly believes that acceptance of the Orgentec offer is the best choice to maximize our shareholders’ value.”
The deal is slated to close in the fourth quarter, and Critchfield said in a phone interview that it would likely not be until then that a decision on whether executives would remain with the company is made. But he said he expects the rest of the 48 employees to remain.
“There’s not going to be any displacement that I know of,” Critchfield said. “I think it will be good for the employees.”
Orgentec also makes specialty diagnostic tests. Critchfield said the company does about $35 million to $45 million in annual revenue.
Corgenix posted first quarter revenue this year of $2.5 million, with a profit of more than $60,000. In June, the local company was awarded a three-year, $2.9 million grant from the National Institutes of Health to speed the development of a rapid diagnostic test kit for Ebola virus as the illness has ravaged parts of Africa in recent months.
Together, Orgentec and Corgenix have about 350 diagnostic tests.
“Our agreement with Corgenix is an important step toward achieving our strategy of building Orgentec into a global specialty diagnostics leader,” Orgentec CEO Werner Hofacher said. “It will give us an immediate and direct presence in the United States, where Corgenix is highly regarded for its quality and innovation.”