Wireless Applications

Technitrol Completes Acquisition of Sonion A/S

February 29, 2008

Sonion brings to Technitrol its hearing instrument component, mobile audio components, and MEMS expertise.


PHILADELPHIA--(BUSINESS WIRE)--Technitrol Inc., (NYSE:TNL) has announced it has completed the acquisition of Denmark-based Sonion A/S, a world-leading producer of highly innovative microacoustic transducers and micromechanical components for manufacturers of hearing instruments and advanced acoustic, medical and mobile communication devices.

The purchase price was approximately $410 million, net of cash on hand at Sonion, based on current exchange rates. Cash on hand at Sonion will be used for operating purposes and for repayment of debt subsequent to the closing.

The acquisition was financed with bank debt and cash on hand. The company obtained debt financing in the form of a $200 million senior term loan facility and a $300 million senior revolving credit facility arranged and syndicated by JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc. Initial borrowings under the revolving credit facility in connection with the acquisition were $168 million.

Sonion is based in Roskilde, Denmark and also has facilities in Poland, China, Vietnam and the Netherlands. It employs about 4,900 people, including more than 140 research and development personnel, and holds more than 500 active patents. In 2008, Technitrol expects Sonion's revenues to be more than $200 million and EBITDA, approximately $48 million. The business is expected to be accretive to Technitrol's cash flows from the outset, and to earnings beginning in 2009, when it is expected to contribute approximately $0.25 per share.

Sonion's hearing instrument components business (approximately 68% of 2007 revenues) consists of subminiature high-performance transducers and plastic electromechanical switches, volume controls and other modules. Included in these products are a variety of components for increasingly popular "receiver-in-canal" hearing aids. Hearing instrument components will become a separate product division of Technitrol's Electronic Components business. Sonion's mobile terminal components business (32% of revenues), which produces wireless handset receivers, speakers and microphones, will be integrated into an existing division, which includes antennas and other radio frequency components and modules.

The Sonion acquisition is in keeping with Technitrol's strategy of leveraging its core competency in high-volume, quality production into engineering-intensive, mission-critical product lines serving rapidly growing markets. Synergies will be developed as Sonion leverages Technitrol's well-established global sales network, advanced supply chain management system and decades of continuous manufacturing improvement activity. Sonion gives Technitrol a low-cost manufacturing presence in Vietnam, but at a relatively early development stage, so that financial upside from this manufacturing strategy is still to be realized. With the global integration of various SG&A functions, Technitrol plans to develop efficiencies and improvements in its existing operations as well as Sonion's.

Growth drivers for Sonion's hearing aid, acoustical and medical products include an aging population; increasingly sophisticated, effective and inconspicuous hearing instruments, many of which are being worn within the ear canal; increasing use of hearing aids in both ears; and increasing penetration of high-end earphones and medical devices in emerging markets. Recently, this Sonion business has been pushing aggressively into the medical device market, to capture opportunities for microacoustical components used in non-invasive drug delivery, defibrillation, biopsy and other devices. Sonion's market share currently stands at about one-third for transducers and more than one-half for subminiature electromechanical parts. Analysts expect revenues in this recession-hedged business to grow at more than 10% annually.

Similar growth is assumed for the mobile device components business, in which Sonion is one of several major suppliers of receivers, speakers and microphones. As with Technitrol's current wireless components, growth is being by sales of handsets, laptops and PDAs, plus the increasing functionality of these devices, which increases components per device.

Sonion has also been a pioneer in the development of the disruptive technology known as microelectromechanical systems, or MEMS. MEMS microphones are much smaller, more durable and more effective than conventional handset microphones. Also, their potential applications extend well beyond mobile phones, to hearing aids as well as critical sensors for automotive, industrial and medical uses. Analysts estimate near-term market growth for MEMS components to be between 40% and 80% per year. Sonion has volume MEMS production capabilities, including two cleanroom facilities, and has patented critical MEMS manufacturing technology.

Morgan Stanley acted as financial advisor to Technitrol in the Sonion transaction.

Based in Philadelphia, Technitrol is a worldwide producer of electronic components, electrical contacts and assemblies and other precision-engineered parts and materials for manufacturers in the data networking, broadband/Internet access, consumer electronics, telecommunications, military/aerospace, automotive and electrical equipment industries.


Add Comment




IIoT University


Deep Learning for Vision Using CNNs and Caffe: A Hands-on Tutorial – 9/22/16 – Cambridge, Mass


IDE






Sensors 2017 Call for Speakers


Sensors Midwest


Advertise


Subscribe



Twitter Feed

Find It Fix It Forum

Sensors invites you to join the Findit-Fixit Forum, where you can get answers to your sensing questions—concerning technologies, products, methods, applications, and services--and also offer help to your fellow engineers. The Forum covers all kinds of topics, from the basics to the extraordinary.

Join the discussion!


© Copyright 2016 Questex, LLC. All Rights Reserved. Sensorsmag. Privacy Policy | Terms of Use

If you are having technical difficulties or considerations, please contact the webmaster.