Otix-WDH Merger Gets Shareholder OK - Analyst Blog

Hearing aid solutions maker Otix Global Inc (OTIX) recently reported that its shareholders have approved its proposed merger with Denmark-based leading international hearing care products maker William Demant Holding (“WDH”).

Otix Global signed a definitive merger agreement with WDH on September 13, 2010. Under the deal terms, WDH offered to pay Otix shareholders $8.60 in cash for each share of Otix common stock. The agreement was subsequently amended in October 2010 with WDH raising its offer for Otix to $11.01 per share.

The transaction, which has been already approved by the Boards of both companies, is now subject to antitrust clearance and other customary closing conditions. The companies expect the merger to be completed within next week.

WDH develops and markets products and equipment for hearing care and communication. The company offers its hearing aid solutions through its subsidiaries, Oticon and Bernafon. Its also provides wireless communication systems and diagnostic equipment. WDH was involved in a bidding war with rival Danish hearing aid and headset maker GN Store Nord for Otix. However, WDH managed to eventually win the race.   

Utah-based Otix (formerly Sonic Innovations) is a leading provider of hearing care solutions with operations across North America, Europe and other select international markets. The company's hearing aid products leverage its industry-leading digital signal processing technologies. Otix markets its hearing solutions under the Sonic and HearingLife monikers. One of its closest competitors is Siemens (SI).

The hearing care market is substantially large and is characterized by unmet medical needs. According to industry estimates, more than 16% of the world's population suffers from hearing loss. In the U.S., roughly 34 million people are affected by this problem. The global retail sales of hearing aids are estimated at over $6 billion. However, the market for hearing aids is currently underpenetrated, in part, due to limited reimbursement coverage.

Nevertheless, adoption of hearing aids is expected to grow driven by demand from an aging Baby Boomer population and increased purchasing power in developing nations. The merger, if successfully consummated, will enable the integrated entity to leverage this opportunity and establish a stronger foothold in the hearing care market.

 
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