Siemens, the German engineering conglomerate, said on Thursday that it had agreed to sell its hearing aid unit to the European private-equity firm EQT Partners and the Strüngmann family of Germany for €2.15 billion, or about US$2.69 billion.
As a result, Siemens said it would not pursue a public listing of the unit, Siemens Audiology Solutions, which it announced in May.
As part of the deal, Siemens would continue to hold €200 million in preferred equity in the business and have a seat on the board of the buyer group. The new owners would be allowed to use the Siemens name for its products in the medium term, Siemens said.
It is with no small amount of mirth we note the German industrial giant is divesting their Audiology division to concentrate on selling $370 million worth of windmills to Wm Demant’s Oticon Foundation…
“Not only is the transaction excellent from a financial perspective, we’re also convinced that both investors have a clear growth strategy for further developing the hearing aid business over the long term,” Hermann Requardt, the chief executive of Siemens Healthcare, said in a news release.
The deal requires regulatory approval and is expected to close in the first quarter of 2015.
In a separate statement, EQT said that it would acquire the business with Santo Holding, the investment vehicle of the Strüngmann family, as minority co-investor.
“We believe Siemens Audiology Solutions provides the ideal platform for an entry into this attractive industry,” Marcus Brennecke, a partner at EQT, said in a news release.
Financing for the transaction is being provided by Deutsche Bank, Goldman Sachs and UBS.
Further on, the NYTimes article states:
The hearing aid business has been a part of Siemens for more than 100 years. The company introduced the first industrially produced hearing instrument, the Esha-Phonophor, in 1913; the first behind-the-ear aid in the 1950s; and the first in-the-ear device in 1966. It produced the first digital hearing aid in 1997.
Siemens Audiology Solutions, based in Singapore, posted revenue of €693 million in the 2014 fiscal year and employed more than 5,000 people.
Balance in the NY Times Dealbook.