Sonova Buys Advanced Bionics

STAEFA, Switzerland (AP) -- Swiss hearing aid firm Sonova Holding AG said Monday it is buying cochlear implant maker Advanced Bionics Corp., based in California, for $489 million in cash.

Sonova expects the transaction, which is subject to regulatory approval, to be completed within three months.

"Sonova will offer the most comprehensive and innovative product and service portfolio covering any customer need for most types of hearing problems," Valentin Chapero, Sonova's chief executive, said in a statement.

Privately-held Advanced Bionics was founded in 1993 and is based in Valencia, Los Angeles County. Its majority shareholder is the biotech investor Alfred Mann.

The company, which has 660 employees and sales in over 30 countries, has an 18 percent share of the global market in cochlear implants. These electronic devices are surgically implanted inside the ear to stimulate the auditory nerves, allowing deaf people to hear sounds.

Sonova spokesman Holger Schimanke said there was little overlap between Sonova and Advanced Bionics, and consequently there are no plans to restructure the business.

"Advanced Bionics will continue to operate as an independent unit within the Sonova Group," Schimanke told The Associated Press. "We aren't talking about any kind of job cuts, definitely not."

He said Advanced Bionics had developed "a great American technology that many people consider to be world leading, but it hasn't really taken off."

"We're going to give them the business and sales expertise to do so," said Schimanke.

Advanced Bionics had a turnover of $117 million last year, a figure which Sonova hopes to double over the coming three to five years, Chapero said.

Analysts reacted cautiously to the announcement, but noted that the purchase of Advanced Bionics represents one of the few M&A opportunities open to Sonova. Two years ago, Germany's anti-cartel agency blocked Sonova's 3.3 billion Swiss franc ($2.76 billion) purchase of Denmark-based ReSound Group.

Zuercher Kantonalbank said the price for Advanced Bionics was high, but judged the purchase as strategic success.

Sonova shares rose 3.1 percent to 112.50 Swiss francs ($111.69) on the Zurich exchange.