Is Siemens hearing price reasonable?
2014In the fiscal year, Siemens’ total hearing revenue is 6.93 billion euros, the profit before tax depreciation and amortization is 1.45 billion euros, the market sales rate has reached 3 times, and the actual price-earnings ratio is far more than 15 times. This price is obviously relative to the economic downturn in the European market. It is quite generous. In combination with the historical SONOVA quotation of Resound and the continued investment of the Siemens Group in the past few years, the author believes that this price is a bit expensive but still reasonable.
After carefully analyzing the contract, Siemens still has to take out 2 billion euros to become a shareholder, which means that the actual price taken is less than 20 billion euros. As a shareholder staying in the new group, Siemens believes that it is also a balance that must be maintained by both parties. If the SIEMENS brand is lost, it is difficult for the listening group to obtain such a high premium. This result is satisfactory to both parties and avoids the risk of a setback. Siemens will gradually retreat like a veteran, the veterans will not die, but will never return.
The new owner EQT Group is clearly optimistic about the hearing aid industry, and believe that the optimistic forecast for the industry is the biggest reason for their bid. But the acquisition alone is not enough. The new owners need to come up with more money and some secret weapons to stand out and create miracles in this highly competitive industry.
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