Dow Jones is reporting that Siemens, the giant diversified global technology company, once again is considering selling off its Siemens Hearing Instruments business.
The sale of one of the world’s six biggest hearing aid manufacturers could represent a tectonic shift in a global hearing aid industry that has been struggling to achieve higher growth rates in a world where millions of people with hearing loss need hearing aids but don’t have them.
Several years ago Siemens put its hearing aid business up for auction and attracted offers from private equity firms for as much as 1.6 billion Euros. But Siemens withdrew the offer to sell, indicating the offering prices were too low in the midst of a global recession that had depressed sales industrywide.
Siemens, which has focused its strategic investments on industrial markets, has been exiting consumer businesses for the past several years. So it’s not seen as wanting to unload a poorly performing business.
Rather, it’s spent the last two years investing in better hearing aid products and technology, keeping its premium sound-processing software up to date and introducing cool new products such as the world’s most waterproof hearing aid.
There’s always the hope that a new owner with an exclusive focus on the hearing business, rather than a massive conglomerate with divided attention, will make the investments in products, sales and marketing that will start to drive growth. But at the same time, there’s the fear that a private equity consortium would load up the company with debt to pay the purchase price, use the cash flow from the ongoing business to service the debt, and cut back on investments in new products and growth.
Under either scenario, sale of the Siemens hearing aid business will shake up the global market for hearing aids and an industry that’s settled far too long for single-digit growth while meeting only a fraction of the growing worldwide need for better hearing solutions.