Nordic firms cash in on hearing aid deal

CapMan and Investor Growth Capital have made a 6.3 times money multiple on their sale of Swedish hearing implant maker Entific.

A consortium consisting of quoted Helsinki-based CapMan, Investor Growth Capital and facial implant maker Nobel Biocare has sold Swedish hearing implant maker Entific to Australian hearing aid maker Cochlear for SEK1.05 billion (€116 million; $152 million).
This represents a 6.3 times multiple of the firms’ original investment, and an IRR of above 60 percent, according to information disclosed by CapMan.
Entific is a Gothenburg-based company, which makes hearing implants. Last year it generated pretax earning of €4.1 million ($5.4 million). The company was spun out of Nobel Biocare in 1999 when the parent company decided to concentrate on its dental and facial implants business. Nobel retained a 40 percent stake, and the private equity firms took 30 percent each. These stakes have been reduced to 34.6 percent and 26.6 percent respectively over five years by management and employee incentive schemes.
CapMan life science investment director Yrjö Wichmann told PEO that an IPO had been considered, but that the firm felt the match with Cochlear was a “marriage made in heaven”. Wichmann said the companies operated in complementary sectors: Cochlear makes hearing aids while Entific provides implants for those for whom traditional aids are not effective.
Investor Growth Capital is the venture capital arm of Nordic industrial holding company Investor AB. It is listed on the Stockholm stock exchange, and has offices in Amsterdam, Hong Kong, New York and Palo Alto.
CapMan is a Helsinki-headquartered private equity firm specialising in mid-market buyouts and investments in the IT, communications and life science sectors. It has offices in Stockholm, Copenhagen and Oslo, and manages approximately €1.3 billion in capital. B-shares in CapMan plc are listed on the main Helsinki Stock Exchange.