EDEN PRAIRIE, MN–It’s official, says Bloomberg News: William F. “Bill” Austin, founder, CEO, and sole owner of Starkey Hearing Technologies, is a billionaire.
That statement didn’t surprise people in the hearing industry, who are well aware that Austin’s company has long been by far the largest American hearing aid manufacturer, and ranks among the world’s “Big Six” hearing aid companies.
Yet, there may be some question about the accuracy of Bloomberg’s calculations of Starkey’s value and of Austin’s $2.7 billion net worth, since they are not based on first-hand information.
As a privately held company, Starkey is not required to make its revenues and profits public. And, since it has chosen to keep its finances private, the Bloomberg Billionaires Index had to derive its figures indirectly, by taking the average enterprise value-to-sales and enterprise value-to-earnings before interest, taxes, depreciation, and amortization multiples of three publicly traded competitors of Starkey: the Swiss company Sonova, owner of Phonak, and two Danish companies–William Demant, which owns Oticon, and GN Store Nord, parent company of ReSound.
Annelise Alexander, who wrote the piece on Austin, added that the Minneapolis/St. Paul Business Journal reported that Starkey had revenues of $840 million in 2012. She also cited a report by an industry analyst with Sanford C. Bernstein Ltd., that Starkey, which has factories in 26 countries, sold almost 900,000 hearing aids in 2013, about 8% of the global market.
AUSTIN NOT IMPRESSED
Austin, whom Alexander interviewed for her story, seemed unimpressed by being designated by Bloomberg as a billionaire. He professed little interest in the financial side of his business, saying that he doesn’t attend his company’s budget and sales meetings and stays as far away from money matters as he can.
He also told the writer, “I never had a burning desire to own a business or make a lot of money.” Nevertheless, he did both. After giving up his plans to attend medical school and going into the hearing aid business instead, Austin, who was born in Oregon in 1942, purchased Starkey Laboratories, a small Twin Cities earmold lab, in 1970, and quickly turned it into America’s most successful hearing aid manufacturer.
Along the way, Austin changed the industry with such innovations as a 30-day, money-back trial period for hearing aids and by leading the movement toward the small in-the-ear and in-the-canal devices that came to dominate the U.S. hearing aid market in the 1980s and 1990s.
He also became known for attracting famous customers to Starkey, including President Ronald Reagan, whose public declaration that he had begun wearing a hearing aid sent hearing aid sales soaring in 1983.
Since then, Starkey has provided hearing aids to scores of celebrities, including four more presidents, two popes, and assorted entertainers, athletes, and political figures, as well as to a great many less known citizens, many of them children. Very often, Austin, who has maintained his dispensing license, personally fits the hearing aids.
FOCUS ON THE FOUNDATION
The Bloomberg reporter noted that for many years Austin has let others take care of his business. That allows him to work almost full-time for the Starkey Hearing Foundation, which provides more than 100,000 free hearing aids a year to people in need in the U.S. and around the world.
Austin goes on many of the foundation’s missions, where, along with many other volunteers, he personally dispenses hearing aids.
AUSTIN IS NOT ALONE
Bill Austin is not the first hearing industry tycoon to be identified as a billionaire. As previously noted on this blog, Forbes reported that a relatively obscure 73-year-old Swiss investor, Beda Diethelm, joined those exalted ranks this March when his 6.5 million shares in Sonova lifted his wealth (measured in dollars) into 10 digits.