Intricon said it inked an exclusive agreement with PC Werth last December to distribute its hearing aid products in the U.K., but the full acquisition will allow Intricon extra access to the U.K’s NHS.
“Our acquisition of PC Werth provides IntriCon a solid foundation to expand our presence in the U.K. and establishes a direct link to the NHS. An immediate initiative will be to increase our sales and market efforts to drive NHS market share. The NHS is widely recognized as the most efficient hearing aid delivery system in the world, and we believe we are well-positioned to serve their needs,” Intricon CEO Mark Gorder said in a press release.
Arden Hills, Minn.-based Intricon said the NHS is the largest purchaser of hearing aids in the world, and as such the company expects its acquisition of PC Werth, and its NHS supply deal, to generate $4.5 to $5.5 million in revenue annually. The company said it also expects the acquisition will be accretive to earnings per share.
Intricon said it anticipates closure of the acquisition in 2015. The company said it plans on keeping PC Werth’s brands and will retain key management from the company after the buy.
In August, IntriCon said its 2nd-quarter sales and earnings were off, except for an 8% increase in its medical business revenues largely credited to Medtronic (NYSE:MDT), the body-worn sensor company’s largest customer.
IntriCon posted profits of $506,000, or 8¢ per share, on sales of $17.1 million for the 3 months ended June 30. That’s a -37.8% profit slide on a top-line decline of -2.2% compared with Q2 2014.
But medical business sales were up 8%, thanks to record sales to Medtronic, driven by the MiniLink Real-Time transmitter Medtronic uses in its MiniMed 530G insulin pump, IntriCon said. The company said it “anticipates Medtronic revenue gains throughout 2015.”