Sonova Holding AG, a leading provider of hearing solutions, has signed an agreement to acquire the Consumer Division from Sennheiser electronic GmbH & Co. KG (Sennheiser) for EUR 200 million ($241 million USD). The Sennheiser Consumer Division, which concentrates on the business of headphones and hearables for private customers, is an excellent fit with Sonova’s strategy to lead innovation in hearing experience and to engage consumers early on their hearing journey. The strength of the brand and the well-established complementary distribution network of the Sennheiser Consumer Division represent strong assets to further the strategy of Sonova.
A license agreement for future use of the Sennheiser brand has been made allowing both companies to use the brand name. Sennheiser had announced in February that it would focus on the Professional business in the future while seeking a partner for the Consumer Electronics business. Sonova will fully take over Sennheiser’s Consumer Electronics business. Subject to regulatory approval, the plan is to complete the transfer of the business to Sonova by the end of 2021.
- The deal will allow Sonova to further expand its attractive portfolio of products; to capture growth opportunities, in particular in the fast-growing market for true wireless headsets and the emerging segment of speech enhanced hearables; and to further expand its channel presence and customer base
- Sonova will leverage the combination of its audiological expertise together with the strong Sennheiser brand and competence in delivering a high-quality sound experience
- The Sennheiser Consumer Division, with currently around 600 employees contributing to this business area worldwide, generates sales of around EUR 250 million annually through a broad online and in-store distribution network
Consumer Electronics products from Sennheiser stand for the best sound and a unique audio experience. With the takeover of the Sennheiser Consumer business, Sonova is adding headphones and soundbars to its hearing care portfolio, which includes hearing aids and cochlear implants, among other hearing solutions. Sonova will leverage the complementary competencies of both companies to strengthen and further expand its business areas in the future. Sennheiser’s many years of expertise as one of the world’s leading companies in the audio industry and the resulting reputation and appeal of the brand are an excellent complement to Sonova’s extensive technological and audiological expertise in the field of medical hearing solutions. A permanent cooperation is planned under the joint Sennheiser brand umbrella in order to continue offering Sennheiser customers first-class audio solutions in the future. A license agreement for future use of the Sennheiser brand has been made.
“We couldn’t have asked for a better partner than Sonova for our Consumer Electronics business,” says Daniel Sennheiser, co-CEO at Sennheiser. “Sonova is a strong, well-positioned company. Not only do we share a passion for unique audio experiences, we also share very similar corporate values. This gives us an excellent foundation for a successful future together.” Co-CEO Dr. Andreas Sennheiser adds: “The combination of our strengths provides an very good starting point for future growth. We are convinced that Sonova will strengthen the Sennheiser Consumer Business in the long term and capture the major growth opportunities.” Both partners see great potential in particular in the market for speech-enhanced hearables and for true wireless and audiophile headphones.
As part of the partnership, a complete (100%) transfer of operations of the Consumer Electronics business to Sonova is planned. This will be aligned with the Sennheiser works councils. For the employees who will transfer to Sonova, the move to the internationally operating and well-positioned company, headquartered in Switzerland, opens up very good opportunities for the future. Currently, a total of around 600 Sennheiser employees works for the Sennheiser consumer business.
Arnd Kaldowski, CEO of Sonova, says: “I am very pleased that Sennheiser has chosen Sonova to further develop the well-renowned Consumer Division. We look forward to welcoming our new colleagues and to building on the combined strengths of both organizations to successfully shape our joint future. The fast-growing market for personal audio devices is rapidly evolving. Combining our audiological expertise with Sennheiser’s know-how in sound delivery, their great reputation as well as their high-quality products will allow us to expand our offering and to create important touchpoints with consumers earlier in their hearing journey. Combining our market-leading technology with the strong brand and well-established distribution network of Sennheiser creates a strong foundation for future growth.”
The Sennheiser brand has been a synonym for first-class sound and excellent product quality for over 75 years. Sonova will also take over the development and production areas of Sennheiser Consumer Electronics so that Sennheiser customers will continue to benefit from this in the future.
With the partnership for the Consumer business, Sennheiser will now concentrate its own strengths and resources on the Pro Audio, Business Communications and Neumann business areas. In these three business units, the company plans to continue to grow at an above-average rate under its own power and to expand its already strong position in the global market.In addition, Sennheiser will successively expand its business units.
This acquisition supports an important element of Sonova’s strategy – to reach ever more consumers, wherever their journey towards better hearing begins. Personal audio devices have become an integral part of everyday life as people interact with their digital devices increasingly through sound. As hearing loss occurs in most cases as a normal part of ageing, first remedial steps may include non-medical solutions to enhance hearing in specific situations. Sonova believes that such complementary solutions will ultimately expand the traditional hearing aid market by increasing adoption rates. The acquisition significantly accelerates Sonova’s own efforts in this area.
The purchase price for the Sennheiser Consumer Division amounts to EUR 200 million ($241 million USD), which will be financed through the existing cash balance. A licensing agreement on customary terms for the Sennheiser brand will be in place in perpetuity. The deal is expected to be EPS accretive immediately. Closing is foreseen in the second half of 2021 after obtaining the relevant regulatory approvals.
Sonova was advised by Goldman Sachs International, Fieldfisher, and KPMG.
Message from Daniel and Andreas Sennheiser:
Dear customers, partners and friends,
In mid-February, we announced that we are looking for a partner for our Consumer business with the aim of concentrating our own efforts on the three business units in the Pro business. Today, just two months later, we have found a partner in Sonova. And we couldn’t have asked for better. A partner who not only shares our passion for audio and a commitment to the highest product quality, but also very similar corporate values. This is an excellent foundation for a successful future together.
Sonova – a global provider of medical hearing solutions headquartered in Switzerland – will fully acquire our Consumer business. As a result, Sonova is adding headphones and soundbars to its Hearing Care portfolio, which includes hearing aids and cochlear implants. Our Consumer Electronics products delight with the best sound and a unique sound experience. Sonova will build on this and combine it with its own technology expertise and strengths in the field of innovative hearing solutions. Under the joint Sennheiser brand, we plan to work together permanently to provide Sennheiser customers with first-class audio solutions and premium products in the future. The combination of our strengths provides an excellent starting point for future growth. We are convinced that Sonova will strengthen the Consumer business in the long term and capture the potential in the best possible way – especially in the market for speech enhanced hearables as well as true wireless and audiophile headphones.
At Sennheiser, we live and breathe audio – in everything we do. Our decades of expertise in audio flow into all our products. We try to understand our customers’ ideas, challenges and ambitions and translate them into new technologies, workflows and products. We share this passion with Sonova, who envisions a world, where everyone enjoys the delight of hearing – whatever their ability – and therefore lives a life without limitations. In both companies – Sonova and Sennheiser – there are great people behind the innovative audio solutions: Teams full of passion and motivation who work continuously to create new hearing experiences for customers around the world – whether with True Wireless headphones or hearing aids. The expertise and years of experience of these teams will complement each other in the future and grow together in the new Consumer unit at Sonova. Accordingly, Sonova will also take over the development and production areas of the Sennheiser Consumer division. Sennheiser customers will benefit from this combination and completely new products will be created. For all the Sennheiser employees who will be working for Sonova in the future, a transfer to Sonova, an internationally active and broadly positioned company, will open up exciting perspectives for the future.
With the partnership for the Consumer business, we will now concentrate our own strengths and resources on the Pro Audio, Business Communications and Neumann business areas: In Pro Audio, with a focus on digital services, we intend to further strengthen our excellent position in the global market. In Business Communications, we will greatly expand our product portfolio in the coming years. Our goal is to be present with our products in the majority of meeting rooms and lecture halls around the world. And Neumann, with its legendary products, is already one of the world’s best-known brands for studio-grade audio solutions. Here, too, we will focus on digital workflows in the future and further expand the business.
This step is one of the biggest changes in Sennheiser’s history. We strongly believe that it is the right step, as it will enable sustainable growth for all business units – including for the Consumer business which will continue at Sonova. At the same time, change creates new perspectives, opportunities and ideas for the future. We look forward to exploring these with Sonova, breaking new ground together and strengthening the Sennheiser brand.
The Sennheiser brand has stood for excellent technology and unique audio experiences for over 75 years. It will continue to do so in the future.
Andreas and Daniel Sennheiser
Founded in 1945, Sennheiser is one of the world’s leading manufacturers of headphones, microphones and wireless transmission systems. With 21 sales subsidiaries and long-established trading partners, the company is active in more than 50 countries and operates its own production facilities in Germany, Ireland, Romania and the USA. Since 2013, Sennheiser has been managed by Daniel Sennheiser and Dr. Andreas Sennheiser, the third generation of the family to run the company.
Sonova, headquartered in Stäfa, Switzerland, is a leading provider of innovative hearing care solutions. The Group operates through its core business brands Phonak, Unitron, Hansaton, Advanced Bionics and the brands of the Audiological Care business, e.g. AudioNova, Geers, Boots Hearing Care, Connect Hearing and Lapperre. Sonova offers its customers one of the most comprehensive product portfolios in the industry – from hearing instruments to cochlear implants to wireless communication solutions.
Pursuing a unique vertically integrated business strategy, the Group operates through three core businesses – Hearing Instruments, Audiological Care and Cochlear Implants – along the entire value chain of the hearing care market. The Group’s sales and distribution network, the widest in the industry, comprises over 50 own wholesale companies and more than 100 independent distributors. This is complemented by Sonova’s Audiological Care business, which offers professional audiological services through a network of around 3,300 locations in 20 key markets.
Founded in 1947, the Group has a workforce of over 14,000 dedicated employees and generated sales of CHF 2.92 billion in the financial year 2019/20 as well as a net profit of CHF 490 million. Across all businesses, and by supporting the Hear the World Foundation, Sonova pursues its vision of a world where everyone enjoys the delight of hearing and therefore lives a life without limitations.
Sonova shares (ticker symbol: SOON, Security no: 1254978, ISIN: CH0012549785) have been listed on the SIX Swiss Exchange since 1994.