Revised April 4, 2013
COPENHAGEN—William Demant Holding, parent company of Oticon, announced today that it has signed an agreement to take over 100% of Neurelec SA, a French man ufacturer of cochlear implants, at a cost of 57.5 million Euros, or about $74 million U.S.
With the acquisition, Demant has joined its archrival, Sonova, as being the only hearing aid companies to also manufacture cochlear implants. Sonova, parent company of Phonak, acquired Advanced Bionics, a U.S. implant maker, in 2009. By taking over Neurelec Demant becomes the only company that makes hearing aids, cochlear implants, and bone-anchored hearing aids.
Demant also is the largest manufacturer of diagnostic equipment for hearing care and owns major hearing aid distribution companies, including American Hearing Aid Associates.
In Demant’s statement about the purchase, Niels Jacobsen, president and CEO of the company, said, “With the takeover of Neurelec, [we] will acquire a strategically important business activity and will thus become the only company in the world that covers all three product categories. And since the William Demant Group is also the world’s largest and leading player in diagnostic instruments, the group now has a unique position when it comes to alleviating hearing losses.”
Demant’s announcement added, “The market for cochlear implants has shown annual growth rates of more than 10% for the past many years, and due to the still low penetration rate, we expect the market to show healthy growth rates in the coming years. Today, annual sales of cochlear implants total 35,000-40,000 units, or wholesale revenue of EUR 700-800 million.” That is about $900 million to $1 billion U.S.
Neurelec develops and manufactures cochlear implants that are sold to hospitals through a network of distributors and a few of its own sales companies. Established in 1977 by MXM Laboratories, Neurelec launched the first fully digital cochlear implant system in 1992. The company had revenues of about 18 million Euros (about $23 million) in 2012, and generated a modest profit.