Sonova announced on May 4 the acquisition of European behemoth, AudioNova, for € 830 million ($954 million). It is reported to be the largest transaction ever in the hearing aid retail market and makes Sonova-owned retail approximately the same size as retail leader, Amplifon. Following this acquisition, Sonova will have over 3,300 stores worldwide with over 2,500 locations in Europe. Sonova estimates AudioNova will have sales of €360m in 2016 and an EBITDA margin of 16%.
AudioNova has more than 1,300 store locations scattered across eight European countries. Its 2014 revenues were reported to be € 333m. Currently, AudioNova purchases hearing aids primarily from William Demant (via brands Selectic and NovaSense) and Sonova (via their Unitron brand).
According to reports, Sonova expects the deal to close during the second half of 2016. The deal, however, does come with some risks, including the possibility of anti-trust reviews in a number of countries. Some industry insiders speculate that the acquisition could create backlash among independents, similar to Sonova’s foray into Costco, who could be angered by a supplier becoming a leading competitor in their area. In addition, some experts remain skeptical of a forward integration strategy (supplier buying distributors of hearing aids), as the retail business is significantly different than the manufacturing/wholesale business with the former being more capital intensive with lower margins.
