ERLANGEN, GERMANY–The sale of Siemens Audiology Solutions to private investors, agreed to on November 6, passed through regulatory scrutiny without a hitch and was finalized on January 15. The purchasers, EQT and the Strüngmann family, paid €2.15 billion (approximately $2.5 billion at the time of closing) to Siemens AG for its hearing aid division, making the transaction the largest in hearing industry history.
In announcing the completion of the sale, the new owners of the world’s oldest hearing aid manufacturer said that the company has been renamed Sivantos and all worldwide affiliates of the former Siemens Audiology Solutions will also take that name. However, it said, the company “will continue to develop, market and sell products under the Siemens brand for the mid-term.” The Sivantos Group will also maintain the Audio Service and Rexton brands.
The main investor in the newly formed Sivantos Group is the Swedish-based EQT, the leading private equity group in Northern Europe. Its portfolio includes companies with total sales of more than €25 billion and over 500,000 employees.
Siemens Becomes Sivantos
RADKE TO REMAIN
The ownership of the new company includes Thomas and Andreas Strüngmann, German brothers, who founded a multi-billion euro generic drug company, and also Siemens AG, which will retain a share of its former division and participate in its future business development. Roger Radke, who had been CEO of Siemens Audiology Solutions since 2010, will retain that role with Sivantos Group.
Radke, who holds a doctorate in chemistry, said that under the new ownership, “We have great opportunities to propel our business and bring cutting-edge innovation and premium service to our customers.”
Marcus Brennecke, partner at EQT, stated, “EQT is fully committed to supporting the management team and employees to further develop the business. We want Sivantos to become the industry leader in technology and customer perception.”
Last fall, when EQT announced the purchase agreement, it said that it plans to position Siemens to become a publicly traded company. To do this, it said, it would “support management in further accelerating current sales growth by continued investments in product development and sales force excellence [and] utilizing the competence of EQT’s industrial network and experience from other healthcare sector investments.”
“EXPECT CONSISTENCY” SAYS U.S. SPOKESMAN
In a message of reassurance to Siemens employees in the U.S., John Urbaniak, communications manager of the former Siemens Hearing Instruments, Inc., said, “Our customers can expect consistency in key areas: contacts will remain the same, as well as contracts, agreements, warranties and service policies. They can continue to rely on our products, programs, and passionate people to serve them.”
The company now known as Sivantos traces its history back to 1878, when Werner von Siemens developed an amplified telephone receiver that allowed people with hearing loss to understand better. That was the origins of what was to become the largest hearing aid manufacturer in the world for much of the 20th century.
Although now ranked fourth among the world’s Big Six hearing aid makers, Siemens still generated revenues of €690 million in 2014 and earnings before interest and taxes of €126 million. The company employs over 5000 people and markets its products in more than 120 countries.