TOP NEWS and HEADLINES in September

  • Sonic Innovations to Merge Into William Demant Holding, Parent of Oticon
  • US Teens’ Hearing Loss Is Much Lower Than Has Been Widely Reported
  • President of Mexico Gives Starkey’s Bill Austin Highest Noncitizen Award
  • Diabetes and Hearing Loss: A Message Often Unheard
  • Hamilton Mobile CapTel Introduces Application for BlackBerry Smartphones
  • Scientists Identify Molecules Involved in Touch and Mechanical Systems
  • Senator Debbie Stabenow Champions Passage of Hearing Aid Tax Credit
  • NIDCD Solicits Your Help in Updating Its Strategic Plan
  • Starkey Hearing Foundation, Home Makeover Show Team to Help Kids
  • Oticon Summer Camps Promote Hearing Pros’ Role in End-User Satisfaction
  • Sonic Innovations to merge into William Demant Group; Sonic shuts down operations in Germany. Otix Global Inc, Salt Lake City, the parent company of Sonic Innovations Inc and HearingLife, has entered into a definitive merger agreement with William Demant Holding A/S (WDH), Smorum, Denmark, the parent company of several hearing-related companies, including Oticon, Bernafon, Interacoustics, Maico Diagnostics, and GSI. Under the merger agreement, WDH will pay $8.60 for each outstanding share of Otix common stock—about $50 million or $65-70 million based on the expected closing balance sheet. The agreement will require the approval of Otix’s shareholders, and it is anticipated that the merger will be completed between mid-November and the end of 2010.

    Otix Global’s distribution activities in the United States and Australia are expected to continue without any change, and will form a natural part of WDH’s distribution activities.

    “In a short period of time, Otix Global has grown from an innovative start-up company to a leading manufacturer and distributor of superior hearing solutions under its Sonic and HearingLife brands,” said Otix Chairman and CEO Sam Westover. “Our product lines have garnered industry attention and awards and are representative of the innovative technology for which Otix is known. The merger with William Demant will provide the research and development, marketing and sales support, and resources necessary to further expand Sonic and HearingLife’s presence in the hearing health care industry.

    “Otix is proud of the many achievements and contributions it has made to the hearing aid industry,” Westover said. “As a pioneer to the industry, many of Otix Global’s technologies have become standard in the industry today. The company’s commitment to manufacture and market products to improve the hearing of millions of people worldwide will only be strengthened by the merger.”

    Otix Global sells hearing aids under the Sonic Innovations brand, and it owns and operates its own distribution networks in the USA and Australia (HearingLife). In 2009, the company recorded a turnover of $96 million and an operating loss (EBITDA) of -$3.7 million. At year-end 2009, Otix Global’s equity amounted to $32 million.

    According to William Demant Holding, the addition of Sonic to its Oticon and Bernafon brands will play an important part in select customer segments, particularly in the United States, Sonic’s primary market. Moreover, due to WDH’s strong global presence, Sonic products are expected to be offered to customers in a number of other markets. The group also sees potential for leveraging existing efforts in the wholesale business, and synergies to be achieved within all areas, including development, production, logistics, marketing, and distribution.

    In a separate press release, Otix Global announced its discontinuation of operations in Germany as of September 14, 2010. In explaining the decision, Westover said, “The regulatory obstacles in Germany have dramatically impacted the feasibility of stability of our business and, as a result, we have made the decision to discontinue our operations.” In 2003, the company purchased Sanomed Handelsgesellschaft mbH, a privately held hearing aid distribution company based in Hamburg, for $13 million. Since then, dispensing regulations have changed unfavorably for the company.

    Industry market analysts were generally upbeat about the news of the expected merger, commenting that, in particular, the deal should bolster William Demant’s mid- to economy-line market presence in North America, while propelling it to a leadership position in Australia. They estimate the transaction will increase the group’s global market share by about 1 percentage point in terms of unit volume.

  • Sona opens doors and offers new business model concept in the United States. A new hearing instrument company, Sona Hearing LLC, has opened its doors in the United States after introducing its products in Belgium, The Netherlands, and France in the first half of 2010—with the goal of offering a new business model designed to facilitate customer-dispenser-manufacturer interactions. As part of the Sonova Group, which includes Phonak and Unitron, Sona reports it will:

    • Allow hearing care professionals to offer their clients the experience of better hearing during their first visit, and begin the successful fitting process;
    • Manage hearing aid inventories on-site for dispensing professionals at no risk or cost (a program called “smart:stock”);
    • Offer state-of-the-art hearing instruments and fitting tools that are backed by Sonova technology; and
    • Introduce innovative business processes and service offerings that create new opportunities for dispensing hearing aids while reducing administrative overhead.

    The sona hearing instrument line.

    Two types of products are available under the new brand. The sona:vogue micro is a micro-BTE slim-tube product, and sona:vogue intro is an instant-fit ITE dual-vent open-fit product. Both are fully automatic and available in 6, 12, or 18 channels aimed particularly at first-time users and consumers with mild-to-moderate hearing loss, with a product range described as “economy” to “business class.”

    According to Sona Managing Director of North American operations Barry Hylas, the product technology is exceptional; however, the appeal of Sona is more than just products. “We really don’t want to fight the hearing aid feature war,” says Hylas. “We certainly offer advanced products, but our real strength is in providing unique integrated solutions that involve the products, an enhanced fitting and counseling approach, and business solutions that help grow a practice.”

    One of the most unique product features is Sona’s flex:performance concept: the performance and price level of the hearing instruments and determined at the time of the fitting by selecting and uploading into the hearing aid one of three defined packages of algorithms. In this way, patients can compare performance levels then select the one that best suits their own hearing, lifestyle, and financial needs. Likewise, established customers can opt to upgrade their hearing aids in the same manner, providing revenue for the dispensing office without necessarily replacing the hearing aids every time.

    Another unique concept is sona’s smart:stock program. Dispensing professionals don’t pay for the devices until they “activate” them. Sona automatically restocks the dispensing office’s inventory whenever it falls below a certain level.

    For more information on Sona, visit www.sonapro.com and see next month’s HR Industry Insider interview with Hylas and Sona Global Marketing Manager Thomas Lang.

  • Scientists respond to recent reports of teen hearing loss epidemic with their own data. Hearing scientists from the University of Minnesota, Minneapolis, have released new research findings showing fewer than 20% of teenagers in the United States have a hearing loss as a result of exposure to loud sounds, thus offering a different analysis of data reported in the Journal of the American Medical Association (JAMA) in August (see August 18, 2010 HR Online news story, “Prevalence of Hearing Loss Among US Adolescents Has Increased Significantly, Say Surveys”).

    The U of M’s research, published in an upcoming edition of the Journal of Speech, Language, and Hearing Research, points out that the small hearing losses audiologists are trying to identify with conventional hearing tests are subject to measurement error, and that as many as 10% or more of children are falsely identified as having a noise-induced hearing loss using these methods.

    “Most media have emphasized the link between exposure to loud sounds and hearing loss when referring to the JAMA study,” says Bert Schlauch, professor in the university’s Department of Speech-Language-Hearing Sciences. “However, many of the findings of the JAMA study are not consistent with hearing loss caused by exposure to loud sounds.”

    These conclusions were drawn from an ongoing study of the hearing of the University of Minnesota Marching Band and a forthcoming paper authored by Schlauch and Edward Carney. Their report, based on computer simulations modeling the statistical properties of hearing tests, says that as much as 10% of the 14.9% figure is consistent with false positive responses. In other words, people with normal hearing can produce spurious responses during a hearing test that look like a mild hearing loss, a result consistent with measurement error.

    “Our findings do not mean that people should not be concerned about exposure to loud sounds, such as those from personal stereo devices, live music concerts, or gun fire,” Schlauch says. “The damage may build up over time and not appear until a person is older. For all sounds, the risk increases the more intense the sound and the longer the exposure, particularly from sustained or continuous sounds.”


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