Cochlear to buy Swedish developer of hearing implants 08:51, Friday, 4 March 2005
Sydney - Friday - March 4: (RWE Australian Business News) -
Cochlear Ltd has signed an agreement to purchase Entific Medical Systems, a Swedish-based international medical device company that develops and markets hearing implants, for 1.05 billion Swedish Krona (about $195 million), effective January 1 2005, from Nobel Biocare Holding AG and other Swedish investors.
The enterprise value of Entific is about $175 million.
Entific is a well-established company which has more than 25,000 patients treated with its Baha hearing implant system.
"The bone-anchored hearing implant system, made of titanium, gives a unique possibility for ENT and neurosurgeons throughout the world to treat conductive hearing loss and also people deaf in one ear (single-sided deafness)," directors said.
The purchase by Cochlear will be funded with existing cash and bank debt, to be raised in a combination of euros and US dollars.
Cochlear anticipates the transaction will close during March.
Revenue in the 12 months to December 31 2004 was 211.5 million Krona (about $40m) with pre-tax earnings of 37 million Krona ($7m).
Compound annual growth in revenue over the past five years has been more than 35 per cent.
The future growth rate is forecast to be less than this, but still well ahead of Cochlear's long-term average growth rate.
Gross margins are slightly ahead of Cochlear.
CEO Dr Chris Roberts said: "Entific is an ideal acquisition for Cochlear. It is a high-quality company operating in the implantable hearing device market.
"It is anticipated that the acquisition will be immediately cash EPS accretive excluding synergies.
"There are exciting synergies from the distribution and customer bases of both companies which will enhance growth in our respective markets. In addition, there are possibilities for leveraging technology between both companies.
"The acquisition of an implantable hearing device company strategically expands Cochlear's reach in treating people with a significant hearing loss and where a traditional hearing aid just doesn't work."
Shares in Cochlear rose 31c to $29.79 yesterday.
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