NEW YORK, NY – In a significant development, Eargo, Inc. (Nasdaq: EAR), has entered into a definitive merger agreement. An affiliate of Patient Square Capital, a prominent healthcare investment firm and Eargo’s principal shareholder, will acquire all outstanding shares of Eargo common stock not currently owned by Patient Square.
acquisition, which values Eargo at $2.55 per share in cash, represents a substantial 52% premium over Eargo’s closing share price on October 27, 2023, just before the transaction’s public disclosure.
The acquisition holds the promise of substantial transformation for Eargo, marking its transition from a publicly listed entity to a private company.
A special committee of Eargo’s Board of Directors, independently advised, unanimously recommended the transaction, deeming it in the best interest of Eargo and its non-affiliated shareholders. The transaction, set to close in Q1 2024, will take Eargo private.
Ropes & Gray LLP is acting as legal counsel to Patient Square. Perella Weinberg Partners LP is acting as financial advisor to the Special Committee and Davis Polk & Wardwell LLP is acting as its legal counsel.
Move to Go Private Triggers Legal Scrutiny
While the acquisition signifies remarkable growth and opportunities for Eargo, it has also garnered attention from the investor community. Legal firms, including Kahn Swick & Foti, LLC, and Halper Sadeh LLC, have announced that they are actively investigating the adequacy of the sale price and the process leading to this acquisition.
Shareholders are being encouraged to explore their legal rights and options in response to this notable development.
Eargo is a medical device company on a mission to improve hearing health. Our innovative products and go-to-market approach address the major challenges of traditional hearing aid adoption, including social stigma, accessibility and cost. We believe our Eargo hearing aids are the first virtually invisible, rechargeable, completely-in-canal, FDA-regulated devices indicated to compensate for mild to moderate hearing loss. Our differentiated, consumer-first approach empowers consumers to take control of their hearing. Consumers can purchase online, at retail locations or over the phone and get personalized and convenient consultation and support from hearing professionals via phone, text, email or video chat. Eargo hearing aids are offered to consumers at approximately half the cost of competing hearing aids purchased through traditional channels in the United States.
Eargo’s seventh-generation device, Eargo 7 hearing aids are FDA 510(k) cleared over-the-counter hearing aid featuring Sound Adjust+ with Comfort and Clarity Modes, which focuses on noise reduction and adapting to users’ environments and needs. It offers consumers an innovative and accessible solution to address their hearing concerns.
About Patient Square Capital
Patient Square Capital (www.patientsquarecapital.com) is a dedicated health care investment firm that partners with best-in-class management teams whose products, services and technologies improve health. Patient Square utilizes deep industry expertise, a broad network of relationships and a partnership approach to make investments in companies grow and thrive. Patient Square invests in businesses that strive to improve patient lives, strengthen communities, and create a healthier world.