Sonova pays $489mm cash for Advanced Bionics

Deal summary reprinted from Strategic Transactions - November 2009

Sonova Holding AG has acquired private company Advanced Bionics for $463.5mm up front plus $25.5mm to be held in escrow, or a total of $489mm, paying just over four times what the fellow hearing systems maker achieved in revenues last year. Read more...

Sonova pays $489mm cash for Advanced Bionics

Deal summary reprinted from Strategic Transactions - November 2009

The purchase price is a lot less than what Boston Scientific was willing to shell out when it offered $740mm plus earn-outs for Advanced Bionics in 2004. However, a few years later the BSC deal took a different turn, with AB separating into two businesses--BSC kept AB's pain management and neurostim operations, and AB became an independent company, retaining its auditory and drug pump products. Now exclusively focused on hearing loss, AB is a worldwide leader in cochlear implants, only second behind Australian firm Cochlear Ltd. with 18% global market share. AB's flagship product, which is the second generation of its older implant Clarion, is the Harmony HiResolution bionic ear, launched in November 2006. Harmony's HiRes 90K electrode is implanted in the cochlea (part of the inner ear), receives sound waves that have been converted into digitally coded electrical signals, and transmits those signals to the hearing nerve, which sends impulses to the brain to recognize the sound. AB was established in 1993 and has been backed financially by its founder and chairman Alfred Mann. It will remain independent under Sonova. The current transaction allows Sonova to become a global player in the cochlear implant space. The company (formerly known as Phonak) hopes to double AB's revenue in the next three-to-five years and believes AB's portfolio is complementary to its middle ear implant DACS (Direct Acoustic Cochlea Stimulation). Using Sonova's wireless communication systems, the combined company hopes to create the smallest, easiest-to-use sound processor available in the industry.

Other device deals this week:

Alliance

  Calypso and Siemens integrate radiotherapy technologies · November 2009
  Cardiac Science to exclusively distribute Omron's monitors · October 2009
  Cyberonics gets patent license from Flint Hills Scientific · October 2009
  GenOsteo, SpineSmith ally in spinal fusion · November 2009

Financing

  Bmeye BV brings in €6mm through its Series B round · October 2009
  Checkpoint Surgical raises $1.1mm in venture financing · November 2009
  CorNova brings in $2.5mm of a potential $6mm round · October 2009
  PhotoMedex privately sells 4.17mm common shares · October 2009

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