Beltone Redux: Welcome to the Hotel California

Holly Hosford-Dunn
January 5, 2016

For over a decade, Beltone Electronics Corp wandered in the wilderness in search of the land of milk and honey as it transitioned from private to public ownership.   Today’s post is the finale, in which Beltone resists reinventing itself as one more cog in the long, fascinating history of the Great Northern juggernaut.

Romancing history, you can think of Beltone and GN as two early but distinctly different communications pioneers that leveraged inventions of the Second Industrial Revolution to grow into giant corporations on separate continents.  By the 1950s, Beltone was large in size but small in scope –an insular, family-owned US manufacturer and retailer of a single product (hearing aids) with global sales.2 GN Stor Nord was large in size and scope –a global public conglomerate of communications and electronics subsidiaries.

Like oil and water, the companies joined in the 1990s and entered the digital age on different tracks:  Beltone intent on autonomous growth of its family-retailer identity;  GN using consolidation strategies to reinvent itself as a technological leader in global hearing aid and headset markets.

The history and outcomes of those endeavors are sketched below, chronologically and by report from various long-time industry insiders with different backgrounds and perspectives.


Beltone by the Year, Between the Lines:  A Private Subsidiary


  • 1997.  J.W. Childs Equity Partners acquires Beltone Corporation.
    • “They ran it into the ground.”  (former Beltone insider)
  • 1998-2000:  Michael Cannizzaro, of J.W. Childs Equity Partners, serves as President and Chief Executive Officer of Beltone Electronics Corporation.
    • He was a smart, hard-headed businessman who managed in just three years to sell Beltone to GN for a huge amount more than Childs paid for it.” (non-Beltone industry insider)
  • 1999.  Beltone Electronics Corp. acquires Philips Hearing Technologies from Amsterdam-based Royal Philips  J.W. Childs Equity Partners is majority shareholder of the combined enterprise.3
  • 2000: GN Nord buys Beltone Electronics Corp for $392.5M(US) in cash and shares and assumes $75M in Beltone debt.
    • GN Resound and Beltone 1999 sales are not that different:  $229M and $149M, respectively. GN Nord integrates Beltone as a GN Resound subsidiary but announces it “plans to maintain both companies’ separate operations.
    • GN has great expectations for the Beltone acquisition, anticipating “... synergies worth 150 million Kroner a year, most of which will be achieved in 2002.
    • For perspective, 150M DKK in 2002 was about $22M(US),  the size of the Beltone accounting fraud writedown taken by GN Nord in 2015. 
  • Jesper Mailind GN Resound Pres & CEO 1997-2008

    Jesper Mailind GN Resound Pres & CEO 1997-2008

    1997-2008:  Jesper Mailind, GN Resound President and CEO, presides over major makeovers as GN reinvents itself:

    • “Gn Resound anno 2001 thus consisted of five former companies, Beltone, Danavox, Philip’s Hearing Instruments, and Resound, with different development departments, production facilities and headquarters.  Jesper Mailind and his colleagues and the management of the new company thus faced a tremendous challenge integrating these very different companies.”
    • “Jesper Mailind’s regime seemed terribly divorced from what was going on, almost as if he were working in a different field. If so, then whoever took over Beltone would have had to take matters into their  own hands to create stability.” (industry insider)
  • 2001-ish:  Referred to as “The Revolt” by one insider, large groups of disenchanted Beltone dealers leave and form joint venture chains with other hearing aid dispensers and manufacturers.  Audibel/Starkey with Bill Austin at the helm; Avada with William Demant Holding.
  • 2003:  Beltone cuts 225 jobs in Chicago and consolidates production to Bloomington, MN.
  • 2004:  Beltone corporate headquarters downsized and moved from Chicago to Glenview, IL, following approval of a $637,500 local tax break.
  • 2004:  Todd Murray appointed President of Beltone US, after running Pearle Vision’s 900 US locations. 8
    • “Murray entered the company in a …storm. He and his team may have made some deals to keep things from falling apart and losing even more dealers that eventually caught up with them.”  (industry insider)
  • 2009:  Todd Murray assumes dual role as president of GN Hearing Care Corp North America (US and Canada) as well as president of Beltone Electronics.
  • 2011:  “Beltone … more than doubled its outlet count in the U.S. since 2004.” (David Smriga, AudiologyOnline)
  • 2012-2014:  Accounting fraud perpetrated at Beltone headquarters.
  • 2015:  Beltone fraud detected, reported by GN Nord at beginning of H2, picked up by media, thought to represent “around 7% of Beltone sales between 2012 and 2014….loss booked is just north of $22M(US).”(Bloomberg)
    • “Beltone is unique in GN in being somewhat separate and having its own financial accounts which clearly did not have the same level of scrutiny as the central business.” (confidential industry report)
    • “… say that back in 2014…the former VP of Finance made fictitious revenue …[and] asked the accounting team to do a sort of — well, book the asset and it is this dispenser — it’s a receivable loan9 …to this dispenser… It’s not been correct that this dispenser owes us money, and now we just remove it again from the balance sheet.” (Anders Boyer, then-CFO of GN Stor Nord in conference call to investors on 8/13/15.)


Beltone By Its Legal Entities


At the end of the post, the question of “What is Beltone” still looms. It is no longer a manufacturer or hearing aids, having ceded that to GN Resound over the years.  What remains is a retail operation, but what kind?  Is it a group of independent retailers with loan agreements to GN (some fictional during the fraud)?; A “family” of dispensers dispersed throughout the US that work in storefronts owned (in part or through loans) by Beltone?; Something in between?

One high-placed industry insider’s view seems plausible:

“Beltone today is a huge marketing division that sends product downstream to a US distribution network made up 60% by audiologists.”

If so, then except for growing and changing credentials of its workforce, Beltone the retailer may not have strayed far from the early path set by Sam Posen’s fleet of hearing aid dealers.

As for all that growth:  whether independent or owned-and-loaned behind the scenes, the Beltone network of dispensing practices is big, like a giant iceberg floating in the Delaware Bay. The State of Delaware is where all sorts of Beltone entities are registered and sequestered with all sorts of names, including King Hearing Aids, Beltone Holdings, II, III, IV, V, Inc; Hearing Holdings.

As Examples….


Beltone Hearing Centers of Florida, LLC, originally a Florida company, was reorganized as a Delaware company in August 2006.  The three owners10, all Managing Members were:

  •  Michael Andreozzi (Rhode Island)
  • Paul Giampaolo (Illinois)
  • Douglas Ressler (Florida)

The same three owners have been listed each year since, including the most recent legal filing on April 28 of this year.

Beltone of Northern Florida LLC, another Delaware company, has operated as a Foreign LLC in Florida since 9/29/09.  Its owners/Managing Members,  then and now are:

  • Michael Andreozzi (Rhode Island)
  • Paul Giampaolo (Illinois)
  • Brian Snowden (Rhode Island)

One industry insider describes Michael Andreozzi, as “the biggest hearing aid dispenser in the US.”  Paul Giampaolo is the VP of Finance at Beltone who stands accused of single-handedly perpetrating the Beltone fraud.


The End


Readers with compulsive tendencies and conspiracy theorists can keep digging and likely find repeating patterns of which they can make what they wish. Hearing Economics is not into conspiracies and is tired of digging, especially after hearing this dreary, Hotel California-esque sign- off on the Beltone family from one longtime industry insider:

“You know how the hearing aid business is.  No one ever really gets out of it.”


References and Footnotes


Great Northern Telegraph Company was founded in Denmark in 1869.  In 1985 it changed its name to Great Nordic (GN) Stor Nord.

2 At the time of its acquisition by GN, the US accounted for 50% of Beltone’s sales; the other 50% were in Japan, the Netherlands, Canada. Spain, Germany, France and Great Britain.

3 Brekfast Briefing, Chicago Sun-Times, Nov 24 1999.

Business Briefs.(Business). Daily Herald (Arlington Heights, IL), April 27, 2000.

Danish Hearing Aid Maker GN Store Nord Buys Beltone Electronics of the US. European report, May 10, 2000).

Iversen MJ.  (2005). GN Store Nord – a Company in Transition 1939-1988. Copenhagen Business School Press.

Roeder D.  Beltone to cut 225 jobs, move production to Minn. Chicago Sun-Times, Nov 17 2003.

Chicago Tribune Marketing Column. Chicago Tribune (Chicago, IL) Mary 5, 2004.

GN loans to dispensers seem to be common and accepted practice.  See footnote 3 in the first post of this series.

10 “A managing member of an LLC is an individual who holds an ownership interest in the company, participates in its day-to day management and has authority to contract on behalf of the company.”  Legalzoom.



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