A November 21st Minneapolis Star Tribune report indicated that Starkey Hearing Technologies may be a target for acquisition. According to the report, mass executive firings and subsequent turmoil have raised eyebrows within the industry and left Starkey Hearing Technologies in a vulnerable position. The speculation of a sale was first reported by Wayne Staab at HHTM on October 11.
Industry analysts believe the company could draw bids of $1 billion to $1.5 billion with some of the leading suitors being several of the other leading hearing aid manufacturers. Korean conglomerate Samsung was also mentioned as a possible buyer in the report, if it looks to enter the hearing instrument business, as has been widely speculated for some time.
Rajat Saxena, medical device analyst for California-based Grand View Research, was quoted in the article as saying Starkey is a very soft target for acquisition. Saxena believes Starkey would garner a lot of attention if it were to go on the auction block, including interest from private equity and investment banking firms. Saxena went on to say:
“Because of so much happening, I believe Starkey is in trouble. They may not really wish to go ahead and sell their business, but they have had no top management for more than two months now. And there are lawsuits and investigations happening, so things may change very soon. It is a very aggressive global market at the moment.”
Prime Target for Acquisition
Piper Jaffray Medical Technologies analyst Thomas Gunderson said buying Starkey would give overseas competitors more than market share. It would also give any potential overseas suitor a leap forward and leverage in US regulations, medical reimbursements and R&D.
The Star Tribune report also noted that at least two additional high level managers were terminated this month. Starkey Hearing Technologies, which 73 year old CEO Bill Austin owns a 91 percent share of, has yet to announce replacements for any of the terminated executives.
In October, one of the terminated executives sued Starkey for wrongful termination, breach of contract and defamation of character, seeking $10.9 million in damages and lost wages. Earlier this month the FBI and IRS raided the home of Starkey’s former president, Jerry Ruzicka.
Update 11/24/15: Our friend Karl Strom, at the Hearing Review, has published a blog post observing the recent speculation by analysts regarding a potential sale of Starkey Hearing Technologies.