Crescent sells National Hearing Care to international buyer
Crescent Capital Partners and Macquarie Group have sold local hearing healthcare business National Hearing Care Group (NHC) to Italian hearing aid retailer Amplifon SA, the leading global player in the sector, for A$460 million ($441 million).
The price paid by Amplifon has garnered positive reactions among Australian private equity players – “they got a terrific result” said one GP – and some surprise among analysts in Europe, who noted that NHC’s P/E multiples exceeded Amplifon’s.
The decision to go with a trade sale after a planned IPO was mooted earlier this month underlines the fragile nature of the public markets. “Given the quality of the business, there was strong interest on both [public and trade] fronts,” Paul Mirabelle, Group CEO of NHC, said. “For a while there, it appeared we would be the company to re-open the IPO stream in Australia.” Macquarie and JPMorgan advised on the exit.
The investors kept both options open from the beginning of the exit process in July, with an IPO registration set for end September, and trading due to begin October 15. A secondary buyout was also one possible exit scenario, with Ironbridge Capital and TA Associates cited as potential buyers. Australian market players have indicated that the twin-track exit process remains popular, if only as a mechanism to exert some leverage on trade or secondary buyers.
The value of the company is also a nod to the strength of Australian companies that can tap into Asian growth. One investor described “some of the really compelling opportunities” in the market as those “that have international exposure, especially where some of the strongest growth is being driven offshore.”
NHC Group was formed in 2006 when the financial investors bought and merged several Australian audiology businesses. Last year NHC bought Bay Audiology, an audiology chain, which gave the group a further 64 practices in New Zealand. It also expanded into India, where it has 11 shops.
Franco Moscetti, Amplifon CEO, said that his company would “benefit from a solid platform to pursue a path of expansion in other Asian markets.” CHAMP Private Equity and Petersen Investments’ lucrative A$660 million ($570 million) sale of educational investee Study Group to Providence Equity Partners in July was another example of the value being placed on businesses driven by growth outside Australia, with much of the company’s expansion coming from Asian student demand.
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