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Cochlear finalizes the purchase of the Oticon Medical cochlear implant

Posted on by darion

The transaction, which did not include a nominal purchase price, marks the end of Demant’s involvement in hearing implants. Source: adriaticfoto / Shutterstock.com.

Hearing solutions provider Cochlear has completed the acquisition of cochlear implant business Oticon Medical from Demant.

The transaction, which did not include a nominal purchase price, marks the end of Demant’s involvement in the hearing implant business.

Cochlear intends to integrate the acquired business in the coming months, with integration costs in financial year 2024 (FY24) estimated at approximately A$30 million before tax.

Integration expenses, primarily related to restructuring, will be disclosed as a one-off and significant item.

However, this will have no impact on Cochlear’s underlying net profit guidance for financial year 2024, which is expected to be between A$385 million and A$400 million.

Cochlear agreed to buy Oticon Medical in April 2022 for approximately A$170 million after Demant decided to exit the hearing implant market.

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As part of the 2022 agreement, Cochlear is committed to continuing to support Oticon Medical’s broad user base of over 75,000 cochlear and acoustic implant recipients.

Funding for this acquisition came from Cochlear’s existing cash reserves.

Cochlear CEO and President Dig Howitt said: “We welcome Oticon Medical cochlear implant customers to Cochlear and remain committed to supporting the long-term hearing improvement of these 20,000 patients.

“We will develop and launch next-generation sound processors and services to enable the vast majority of customers to migrate to Cochlear’s technology platform over time. We will also support customers by ensuring continued access to repairs and replacements of current Oticon Medical cochlear implant technology for as long as possible.”

Last month, Cochlear received approval from the U.S. Food and Drug Administration to expand use of Osia to children as young as five years old.

Under this decision, the eligible age will be lowered from 12 to five years, so that younger children with conductive hearing loss, mixed hearing loss and single sensorineural deafness will be able to benefit from this technology.