New dawn for UK hearing aid market


Ultravox, the UK’s market leader in the dispensing of hearing aid devices has been sold in a €100 million deal.

Amplifon SpA, the Italian based, worldwide market leader has acquired Manchester based Ultravox which operates under four retail brands from 250 centres nationwide.

Lead advisers to the deal were Paul Jones and Jon Mercer of Clearwater Corporate Finance who believe this deal signifies the start of a fundamental restructuring for the UK hearing market.

“Private sector sales of hearing aids have grown significantly and are expected to accelerate in the future as the NHS tries to cope with the ever-increasing demand of an ageing population”, comments Paul Jones, partner with Clearwater Corporate Finance. “Ultravox, the UK number one is in a unique position to fully benefit from this change and became a ‘must have’ for the global market leader”.

With a £57 million turnover, Ultravox has as 23 per cent market share of the UK private sector. The company has four well-known high-street brands; Ultratone, Sietech, Hearing Health and Active Life UK.

Since 2001, Ultravox has increased its number of high street branches from 76 to 138 and in 2005 alone, opened in 41 new locations. The company also operates from over 120 day centres across the country. It provides services direct to its customers at home (domiciliary) through over 100 dispensers in the field and provides audiological services, occupational health and mobility products in some branches.

The UK hearing aid market is characterised by a shortage of audiologists, NHS funding issues and long waiting lists on the NHS (of up to 18 months). Over 80 per cent of the UK hearing aid market is still dispensed through the NHS. A significant element of this is dispensed through a Public Private Partnership (PPP), of which Ultravox is a key partner.

The PPP has had some success in delivering on a Government initiative to reduce NHS waiting times, but going forward, increased supply, both through the PPP and direct private sector dispensers is fundamental to achieving the Government’s target of a maximum 18 weeks waiting time for an NHS hearing aid.

Jeff Murphy, chief executive of Ultravox said: “We have seen continuous growth working successfully within both the public and private sectors of the market. 72 per cent of peopole over 60 have hearing deficiencies and the ageing population is putting an enormous strain on the current system. The PPP is the first serious attempt to try and improve the long term efficiency of the market and will continue to evolve, but the role of the private sector is critical. Amplifon is a service led business which will bring enormous benefits to our public and private sector customers and many exciting opportunities for our employees. It is a very exciting development for both us and I believe the market generally”.

The deal involves a significant cross-border element, with an Italian buyer and shareholders based in the UK, Spain, Switzerland and Denmark. Ultravox has over 50 shareholders, many of which are employees who will share in the sale proceeds.

Since its flotation in June 2001, Amplifon has shown 19 quarters of continuous growth. Led by chief executive Franco Moscetti, the business turns over in excess of €500 million with an EBTIDA in 2005 of €100m.

Amplifon has for some time been keen to enter the UK market, one of the largest hearing aid markets in the world, and the acquisition of Ultravox, Amplifon’s largest acquisition to date, places it directly into the UK’s market leading position.

This deal also represents the largest acquisition by an Italian company in the UK this year.

Geoff Blower (partner), David McGlennon and Victoria Moore from the Manchester office of law firm Eversheds advised the majority shareholder of Ultravox.

Lovells advised Amplifon on this transaction. Lovells’ team was led by Frances Le Grys (London, corporate partner), Marco Rota Candiani (Milan, corporate partner) and Pamela Buxton (London, commercial partner). Ernst & Young undertook due diligence on behalf of the purchaser (Graham McConnell, Nick Gittings, Lee Simpson, Mitchell Cox, Alison Barnes, Emma Suchland and Adrian Walker).