GN Store Nord A/S, Taastrup, Denmark, announced that GN ReSound has offered $58 million (DKK 325 million) to acquire Otix Global, the parent company of Sonic Innovations, Salt Lake City.
On September 13, Otix and William Demant Holding (WDH), the parent group of Oticon and Bernafon, announced a “binding, conditional merger agreement” in which Otix would be merged into the WDH Group for $50 million (see “Sonic Innovations to Merge Into William Demant Holding A/S, Parent of Oticon” ). In total, the bid would have been worth $65-70 million based on the expected closing balance sheet.
However, on September 27, GN requested that the Otix board reconsider its agreement with WDH and accept a higher bid of $58 million, or about $73-78 million on the closing balance sheet.
Statements by WDH and Otix were not yet available at the time of this report, so it is unclear what actions are being considered by the companies.
GN reports that the acquisition will “complement GN ReSound’s strong US presence and secure a significant position for GN ReSound in the Australian hearing aid market.”
Otix Global sells hearing aids under the Sonic Innovations brand—reportedly the world’s eighth largest hearing instrument manufacturer—and owns and operates its own distribution networks in the USA and Australia (HearingLife). In 2009, the company recorded a turnover of $96 million and an operating loss (EBITDA) of $3.7 million. At year-end 2009, Otix Global’s equity amounted to $32 million. The previous proposed merger, as reported by market analysts, would have increased WDH’s global market share by about 1 percentage point.
Last Monday, GN ReSound A/S released a press release that, in part, stated:
On September 13, 2010, Otix Global Inc announced that it had entered into a merger agreement with another hearing aid manufacturer for a total consideration to Otix Global Inc shareholders of approximately USD 50 million. However, the proposed merger is still subject to regulatory approvals and the approval of the Otix Global Inc shareholders at a general meeting.
As part of the ongoing business GN ReSound is continuously considering strategic opportunities. One of these opportunities has been a potential acquisition of Otix Global, Inc that would complement GN ReSound’s strong US presence and secure a significant position for GN ReSound in the Australian hearing aid market.
Otix Global, Inc. is well known for its advanced hearing care solutions in several markets and segments and will add to GN ReSound’s portfolio of innovative and groundbreaking products if our proposal is accepted and a transaction with Otix Global, Inc. completed.
Following GN ReSound’s proposal, it is up to the board of directors of Otix Global, Inc. to evaluate the proposal and determine whether the proposal constitutes a "Superior Proposal" as such term is defined under the current merger agreement and, if so, to terminate the current merger agreement in accordance with its terms in order to accept our proposal. The completion of the transaction outlined in our proposal would require certain regulatory approvals and the approval of the Otix Global Inc shareholders at a general meeting.
SOURCE: GN ReSound Press Release