Industry

HearUSA Lashes Back At Siemens With A Lawsuit And Gets Support From A Principal Investor

HearUSA to Siemens: Right back at you! Responding to an SEC filing in which Siemens Hearing Instruments threatened an unfriendly takeover following a dispute over the terms of a loan payment, hearing-aid retail chain HearUSA said it filed a suit in the Supreme Court of the State of New York seeking a declaratory judgment to prevent Siemens from making good on its threat. At the same time, Arcadia Capital Advisors, one of HearUSA’s largest institutional investors, issued a news release supporting HearUSA and accusing Siemens of “a ruse so that they can steal the company at depressed valuations.”

In a Schedule 13D filing on Jan. 18 with the U.S. Securities and Exchange Commission (SEC), Siemens said it was considering exercising an option to buy out HearUSA following the Orlando, Florida-based company’s failure to make a timely debt payment. HearUSA Chairman and CEO Stephen Hansbrough responded immediately, scolding Siemens for a “negative and heavy-handed approach,” before following up with its announcement this week of the New York Supreme Court suit. Arcadia Capital Advisors chimed in with its own public statement, saying Siemens “is choosing to play the role of a bully” and accusing Siemens of trying to acquire HearUSA at a fire-sale price: “The recent SEC filing by Siemens smells strongly of market manipulation,” said Arcadia Capital Managing Director Richard S. Rose. “We believe their actions are a self-serving scare tactic, so don’t be surprised if Siemens comes out with a low-ball offer for the company.” Read more

Sonova CEO Says Recall Of Advanced Bionics Hi-Res 90K Cochlear Implant Might Be Over By April

Bloomberg News confirmed that Sonova Holding AG is working feverishly to fix the problems that spurred a global recall of the Advanced Bionics (AB)Hi-Res 90K cochlear implant and hopes to end the recall as early as April or at the latest by the autumn of this year.

Sonova CEO Valentin Chapero Rueda earlier this week indicated in an interview with the Swiss newspaper Handelszeitung that the AB cochlear implants could be back on the market by April, but a Sonova spokesperson clarified the projection in the subsequent Bloomberg story, saying “There’s also a likelihood it could be autumn. Nothing’s final.” Read more

How Much Government Regulation Should There Be Of Noise And Hearing Loss In The Workplace?

Manufacturers of personal hearing protection solutions are missing an opportunity by not raising their voices to be heard in the debate over government regulations limiting noise in the workplace. When two U.S. Senators this week persuaded the U.S. Labor Department to back off from proposed rule changes that would have required large and small companies to more aggressively manage noise levels in the workplace, they put their finger on a critical question: Should the government force companies to limit the overall noise they create, or should government instead simply require companies to provide their employees with effective personal hearing protection?

When the government tells manufacturers to lower overall workplace noise volume, it forces businesses to install expensive sound-dampening systems that can amount to huge capital investments. But when the government simply tells businesses to protect the hearing of their workers in the most effective way possible, the first move is to outfit workers with highly effective (and highly cost-effective) ear plugs, ear muffs, or more sophisticated hearing protection devices that allow them to communicate even as their hearing is protected from over-loud noise.

Unfortunately, government bureaucrats often are more interested in fast but expensive one-size-fits-all solutions than they are in getting up to speed on things like the variety of new personal hearing protection technologies that can do the job better and less expensively. Therefore, if makers of personal hearing protection devices want to increase their market and sales, they should be advocating for sensible hearing-protection rules that require companies to issue the right kind of hearing protection equipment to their employees, over rules that require more expensive investments in overall workplace noise reduction. Read more

Siemens Considers An Unfriendly Takeover Of Leading Hearing Aid Retail Chain HearUSA

Siemens AG is considering expanding its footprint in the hearing-aid industry with a potentially unfriendly takeover of HearUSA, one of the largest hearing-aid retailers in the United States. Siemens last year moved to exit the industry when it put its Siemens Hearing Instruments subsidiary up for auction but subsequently reversed course and recommitted to its hearing-aid business. Now, in a Schedule 13D filing on Jan. 18 with the U.S. Securities and Exchange Commission (SEC), it says it is considering exercising an option to buy out Hear USA following the Orlando, Florida-based company’s failure to make a timely debt payment. In the filing, Siemens said that in a Dec. 22 meeting, Hear USA had asked to defer some part of its debt payments scheduled for the end of December (approximately $1.9 million USD) and the end of January (approximately $2.2 million). Siemens, which already has a 14.9 percent stake in HearUSA, indicated in its SEC filing that rather than allow future deferment of debt payments, it would consider acquiring the company.

HearUSA Chairman and CEO Stephen Hansbrough responded quickly with a news release saying that “statements made by Siemens in its Schedule 13D fail to provide all of the facts about our relationship with them and our position.” Indicating that there were disagreements about “legitimate contract issues” that the two parties had yet to resolve, Hansbrough said “we are very disappointed that Siemens has taken this negative and heavy-handed approach.”

Siemens and Hear USA have a long-term relationship, with Siemens providing substantial funding to Hear USA in return for the retailer’s promise to re-sell Siemens’ hearing aids. HearUSA has struggled through the recession to grow profitably, but Hansbrough said in his statement that orders for new hearing aids are running approximately 13 percent ahead of a year ago, and that the company expects to return to profitability in 2011. In the past several years HearUSA has expanded its sales for managed care organizations through its network of more than 2,000 hearing care providers and 176 company-owned retail locations. It is also the administrator of the AARP Hearing Care Program, which reaches millions of potential hearing-aid customers.

Sonova To Cut Staff In Wake Of Advanced Bionics Cochlear Implant Recall

The Wall Street Journal reported that Sonova Holding AG, parent of worldwide hearing aid market leader Phonak and other brands of hearing-aid and hearing-implant suppliers, will speed up an ongoing reorganization and cut staff by as many as 100 employees following the decision by its subsidiary Advanced Bionics (AB) to pull its cochlear implant products off the market until product quality issues are resolved. In November, the U.S Food and Drug Administration (FDA) announced that Advanced Bionics is voluntarily recalling its HiRes 90K cochlear implant device following two instances of a malfunction that required the surgical implant’s removal after “recipients experienced severe pain, overly loud sounds and/or shocking sensations at 8-10 days after initial activation of their device.” Read more

William Demant Commits To Maintaining Sonic Innovations Hearing Aid Brand With Product Improvements And Appointment Of New Leader

William Demant Holding, which recently won a bidding war to acquire Otix Global, has committed to supporting Otix’s Sonic Innovations hearing aid brand, with the appointment of a new leader and product expansion including a new version of its super-power Endura hearing aid family. The Sonic Innovations brand will be a sibling to Demant’s flagship brand, Oticon hearing aids, which is one of the world’s top six hearing aid suppliers.

The parent company recently appointed Joseph A. Lugara, a 25-year hearing-industry veteran, to lead Sonic Innovations as President and COO. It also added a new model in its Endura hearing aid family, Endura 6, providing severely impaired customers with a broader range of features at different price points. Sonic Innovations will also move its headquarters in the U.S. from Salt Lake City, where it was founded, to New Jersey, near the U.S. headquarters of both Oticon and another William Demant hearing aid brand, Bernafon.

While William Demant and GN ReSound Fought Over Otix, Sonova Widened Its Hearing-Aid Industry Market Lead

As GN ReSound and William Demant battled over who would win the battle to acquire Otix Global this fall, hearing-aid industry leader Sonova stuck to its knitting and on Nov. 16 claimed it has widened its market share lead. But at the same time, all three of the publicly traded hearing-aid manufacturers hinted they have turned the corner after several years of anemic growth in the global recession.

Sonova, parent of Phonak and other hearing-aid brands, reported more than eight percent organic growth in the first six months of its fiscal year in addition to revenue gains from the acquisitions of cochlear implant maker Advanced Bionics and InSound Medical, developer of the “invisible” Lyric hearing aid. With the growth in the global hearing aid market projected at no more than five percent in 2010, Sonova’s growth, powered by a slew of successful new products introduced over the past two years, earned it a substantial increase in market share. However, in the same report, the holding company lowered its earnings forecast for the remainder of the year, disappointing investors looking for earnings growth combined with faster revenue growth in the industry. Read more

Bidding War Breaks Out For Otix Global As William Demant And GN ReSound Vie For Market Share In Consolidating Hearing Aid Industry

A bidding war has broken out for Otix Global, maker of Sonic Innovations hearing aids and one of the world’s seven largest hearing-aid manufacturers, with William Demant Holding today matching GN ReSound’s $58 million (USD) acquisition bid. GN ReSound last week had topped William Demant’s initial $50 million bid to acquire the struggling U.S.-based company. Today’s $58 million, $10-per-share matching offer by William Demant, parent of global hearing-aid brands Oticon and Bernafon, demonstrates it remains intent on acquiring the Sonic Innovation brand to increase its share of the global hearing aid market. There was no immediate response from GN ReSound parent GN Store Nord on whether it will keep the bidding war going by responding with another higher bid. Read more

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