Under the terms of the agreement, Covalon Technologies will buy all the assets and workforce of AquaGuard business from Cenorin.

The Canadian medical technologies company expects that the transaction will be completed in less than 60 days and is subject to customary closing conditions and TSX Venture Exchange and lender approval.

AquaGuard develops infection protection products that protect surgical incisions, intravenous (IV) sites, catheters, PICC lines, and other dressings from water and other moisture while a patient showers.

Its product range provides protection for sites and dressings all over the body and they can be applied by most patients without the need for assistance from medical professionals.

AquaGuard president Gerry Arambula said: “Our AquaGuard team has built a profitable and growing business that is well-positioned to represent and sell many of Covalon’s infection management products, such as IV Clear, immediately into our customer base. We are looking forward to working with the Covalon team to transform Covalon’s business in the United States.

“Products will be made available through AquaGuard’s established distribution channels at key hospitals and group purchasing organizations across the United States, as well as through third-party distribution partners, including Amazon.”

Under the terms of the agreement, $3.6m will be paid in cash on closing, $500,000 in shares of Covalon will be issued on closing and will be held in escrow for up to two years.

Covalon said $2.5m is payable in 12 months from the closing date and $5m will be paid in 24 months from the closing date. $705,308 of assumed liabilities is payable to management and key staff of AquaGuard by issuance of shares of Covalon Technologies on closing.

Furthermore, a potential contingent amount of up to $900,000 is payable, after certain revenue targets are achieved by 31 December this year.

Covalon CEO Brian Pedlar said: “AquaGuard’s talented sales team has built strong relationships with clinicians and hospital staff throughout the United States that make decisions on the very same products Covalon makes – vascular access dressings, surgical site management products, and advanced wound care dressings.”