Amplifon plummets after Gn Hearing deal announced, 2.3 billion deal

(Il Sole 24 Ore Radiocor) - Amplifon down sharply at Piazza Affari , on the news that the company has entered into anagreement to acquire Gn Hearing, a€2.3 billion deal. In detail, the company surprisingly announced a large transaction. It signed a definitive agreement with Gn Store Nord A/S to acquire the entire Hearing business through a combination of shares and a cash component.

GN Hearing has been valued at approximately EUR 2.3 billion, a sum that will be paid with both cash and shares. In fact, at the closing of the acquisition, according to the terms of the agreement, GN will receive EUR 1.69 billion in cash and 56 million Amplifon shares, becoming the second largest shareholder in the Amplifon Group, behind Ampliter (which currently holds 68.3%), with a stake of around 16%. The financing of the cash component is entirely guaranteed by a bridge loan, but Amplifon is evaluating different alternatives, in the context of evolving market conditions, to subsequently refinance the bridge loan with a mix of debt and equity and/or equity-linked instruments, with timing and amounts still to be defined.

The capital increase will amount to a maximum of EUR 0.75 billion. So reported the group's note highlighting that Amplifon's major shareholder Ampliter and major shareholder Tamburi Investment Partners have confirmed their strong long-term commitment to Amplifon and their financial support for the transaction, including investment in the future capital increase. The completion of the transaction is expected by the end of 2026, subject to the usual conditions precedent, including the completion of the spin-off (carve-out) of GN Hearing from the GN Group and the issuance of the necessary regulatory approvals.

Based on fiscal year 2025 results, the new group will have aggregate revenues of approximately EUR 3.3 billion and an aggregate pro-forma adjusted ebitda of approximately EUR 830 million (including net synergies when fully implemented), with a margin of around 25%. Amplifon has already indicated that it expects significant, easily realisable and low risk net synergies will be generated at ebitda level of EUR 60-80 million by the end of 2029, mainly resulting from the internalisation (insourcing) of Amplifon's hearing aid volumes, with significant upside potential yet to be quantified. Non-recurring costs related to the integration are expected to be in the range of EUR 80 million to be incurred in the next 2-3 years from the closing.

Intermonte welcomed the transaction as it will create "avertically integrated global leader in audiology, strengthening Amplifon on innovation, product development and presence in key markets, particularly in the States". The SIM therefore confirmed its 'Outperform' recommendation on the shares with a price target of €19.