Hearing aid maker Sivantos, formerly Siemens (NYSE:SI) audiology biz now owned by PE firm EQT, announced plans this week to merge with Danish hearing aid maker Widex in a deal that could make the merged group the third largest player in the hearing aid market, according to a Reuters report.
The merged company is expected to have combined revenues of approximately $1.9 billion (EU €1.6 billion), EQT said in a press release, and will allow for expanded investment into future technology and software for treating hearing loss.
The newly merged group has not yet decided on a new name or announced which of the combined entity’s monikers it will operate under.
“Sivantos has developed immensely during EQT funds’ ownership and now the idea is to create a game changer for the future of hearing. Combining these two innovative companies will change the hearing experience for people with hearing loss across the world. In Widex, we have found an equally strong partner to Sivantos, sharing a passion for enriching the quality of life for people with hearing deficiencies. The combined company presents a unique opportunity for EQT to extend the investment horizon in Sivantos and take part of the next phase of transforming the hearing aid industry. With nearly 170 years of combined experience, Sivantos and Widex will take the lead in developing hearing aid technology for future generations,” EQT Partners partner & EQT funds investment advisor Marcus Brennecke said in a prepared statement.
The combined company will employ more than 10,000 individuals and will be valued at more than $8.3 billion (EU €7 billion) with $3.5 billion (EU €3 billion) in debt, according to Reuters.
Funds of PE firm EQT will own a majority of the merged group, according to Reuters, while Widex-owners will retain the largest stakes and make up the largest shareholder group in the combined company.
“We and Sivantos share a common vision of giving people unlimited access to a world of sound by providing unparalleled hearing aids and customer services. I am confident that our employees, partners and customers will benefit from this merger as it will allow us to accelerate our efforts to pioneer innovation, quality, manufacturing and customer satisfaction. Further we will expand our geographical footprint and provide exciting career opportunities for our employees across countries and functions. The merger fits with the families’ values and long-term goals for Widex and that’s why we have decided to substantially invest to become long-term owners,” Widex chair Jan Tøpholm said in a press release.
The merger may also push back EQT plans to list Sivantos, though plans for an IPO are still “very, very likely,” according to Reuters, referencing an interview with Brennecke.