IntriCon Corp, Arden Hills, Minn, has purchased PC Werth Ltd of London, one of the oldest multi-line suppliers of hearing healthcare products and equipment in the UK and a supplier to the National Health Service (NHS), the world’s largest provider of hearing aids.
IntriCon Corporation is a public company (NASDAQ: IIN) that designs, develops, manufactures, and distributes miniature body-worn devices, and has been a long-time supplier of components to the hearing industry. In recent years, the company has become a major manufacturer of hearing aids and personal sound amplification products (PSAPs). Along with its substantial involvement in medical device manufacturing, IntriCon has developed and manufactured hearing aids for several companies, including United Healthcare’s Hi healthInnovations and the new joint venture with the Academy of Doctors of Audiology (ADA) in the production of earVenture hearing aids.
In December 2014, IntriCon entered into an exclusive agreement with PC Werth Ltd to distribute its hearing aids in the UK. By acquiring PC Werth, IntriCon gains direct access to the NHS and greater control over its efforts to accelerate new market penetration in the UK, says the company. As previously noted, NHS is the largest purchaser of hearing aids in the world, supplying an estimated 1.4 million hearing aids annually—or about twice the total hearing aid unit volume of the US Department of Veterans Affairs (VA). Post integration, IntriCon expects the acquisition will generate $4.5 million to $5.5 million in revenue on an annualized basis, and be accretive to earnings per share.
The transaction will require various NHS contracts to be novated, which the company anticipates completing in 2015. Going forward, IntriCon reports that it will continue to use the PC Werth tradename and Kamplex brand. Key management of PC Werth will be retained as part of the transaction.
One of the UK’s most venerable hearing care products distributors. PC Werth was established in 1947 by Peter Werth who is widely credited as being the father of the independent dispensing profession in the United Kingdom (UK) and a founder of the Society of Hearing Aid Audiologists of Great Britain (SHAA). Before Werth, most UK hearing aid dispensing offices were owned by large retail companies who manufactured their own instruments and employed sales staff at offices in major cities. Werth established the first independent source of supply for UK dispensing practices through access to high quality products from US and European manufacturers. Werth’s son, the late Lawrence Werth, as well as PC Werth Managing Director Tom Parker, continued to transform the company to its present market position.
“Our acquisition of PC Werth provides IntriCon a solid foundation to expand our presence in the UK and establishes a direct link to the NHS,” says Mark Gorder, president and chief executive officer of IntriCon, “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.”