Business News In Brief
This article was originally published in The Gray Sheet
Executive Summary
William Demant snaps up Otix Global: Maker of Sonic hearing aids will be acquired by hearing aid maker William Demant for $50 million under a definitive merger deal announced Sept. 13. William Demant will pay $8.60 per share for the company, a 113% premium over the stock's Sept. 10 closing price of $4.04. Adding Otix, which changed its name from Sonic Innovations in 2009, will add a third brand to William Demant's Bernafon and Oticon hearing aid lines and bolster market share by 1%, according to William Demant. The latter firm controls 18% of the global hearing aid market, behind Sonova (23%) and Siemens (20%) but ahead of Starkey (12%), GN ReSound (11%) and Widex (9%), according to a June report from Jefferies International analyst Ingeborg Oie. Salt Lake City-based Otix reported 2009 sales of $95.8 million, down 23%; the decrease was due to "the slow economy" in North America and reimbursement changes in Germany in April 2009 that prohibited direct fitting fee payments from hearing aid retailers to doctors, the company explained. In conjunction with the merger, Otix announced it discontinued German operations as of Sept. 14. Danish firm William Demant, which generated 2009 revenue of $1 billion, up 6%, says that Otix' Sonic brand will now benefit from its "competitive infrastructure and R&D capabilities." The firm expects synergies to be achieved "within all areas, including development, production, logistics, marketing and distribution.