Stäfa, Switzerland — Sonova Holding AG announced a change in the existing acquisition agreement with representatives of the former shareholders of InSound Medical Inc. A one-off payment of USD 94 million will replace all previous earn-out obligations.
Sonova acquired InSound Medical in January 2010 for USD 75 million, plus earn-out payments that depended on InSound’s future financial success.
Sonova said in a press statement that the decision to buy out InSound shareholders’ future earnings obligations was made in order to allow Sonova to include InSound Medical into the general Phonak US distribution strategy. Without this buyout, InSound would continue to be managed separately, due to the variable purchase price component.
With the closing of the cash payment of USD 94 million, both Sonova and the former owners of InSound Medical are now released from all mutual obligations. As a result, Sonova can now fully manage and distribute InSound’s Lyric hearing aid product line in the United States.
“This agreement will enable us to develop our business with Lyric in an optimal way,” explained Valentin Chapero, CEO of Sonova, in the press statement. “Sonova is now enabled to focus its entire distribution organization on the commercial potential of Lyric in the US.”
Lyric was the first 100% invisible, extended-wear hearing device that can be worn in the ear for up to 120 days.
SOURCE: Sonova Holding AG