ReSound Corporation Announces Definitive Agreement to be Acquired
by GN Great Nordic for $180 Million; Combined companies will be a
market leader in hearing health care
05:07 a.m. May 10, 1999 Eastern
REDWOOD CITY, Calif.--(BW HealthWire)--May 10, 1999--ReSound
Corporation (Nasdaq:RSND) and GN Great Nordic today announced the
execution of a definitive agreement whereby GN Acquisition Corporation, a
wholly-owned subsidiary of GN Great Nordic, would purchase for cash all
outstanding shares of ReSound common stock for $8.00 per share. The
board of directors of ReSound has unanimously approved the transaction and
resolved to recommend that ReSound shareholders accept the offer.
Under the terms of the merger agreement, GN Acquisition Corporation will
initiate a tender offer for all of the outstanding shares of ReSound to
commence within five business days. Once initiated, the offer will be open
for twenty business days unless further extended. GN Acquisition
Corporation's tender offer is conditioned upon, among other things, there
being validly tendered and not withdrawn a number of shares that equals at
least ninety percent of the outstanding shares of ReSound. After the
consummation of the tender offer, GN Acquisition Corporation has agreed to
acquire any of the remaining outstanding shares of ReSound pursuant to a
second-step merger at the same price per share paid for shares tendered.
ReSound is a hearing health care and human communications company that
designs, develops, manufactures and markets technologically advanced
hearing devices and communications devices. ReSound's products utilize
proprietary sound processing technology originally developed by AT&T Bell
Laboratories and subsequently enhanced and refined by ReSound. Products
include the Digital 5000 Series products, which incorporate fully
software-based digital sound processing technology; a complete product
portfolio of digitally programmable devices; fitting systems for
programming, fitting and fine-tuning for all ReSound programmable devices;
the Avance Hearing Enhancer, an innovative, low cost product for people
with mild hearing impairment; and the CommPort System, an integrated
microphone and receiver system marketed and sold by Motorola to public
safety personnel.
ReSound's business will be combined with GN Great Nordic's GN Danavox
subsidiary, an international manufacturer and distributor of a full range of
advanced hearing devices, audiological diagnostic equipment and other
hearing-related products. The GN Danavox product portfolio includes
Danalogic, a software-based digital hearing device with digital feedback
suppression and Danasound, a range of digitally programmable products; as
well as leading integrated computer-based audiological measuring equipment,
the Aurical, for diagnosing hearing loss and adjusting and testing hearing
devices. In 1996, GN Danavox and ReSound, along with AudioLogic,
formed a strategic alliance to develop a standard hardware platform for digital
signal processing technology.
The combined companies will have revenues in excess of $200 million and
will be a worldwide market leader in hearing health care. GN Great Nordic
intends to establish the headquarters of its hearing health care operations in
Redwood City, California. In addition, products will continue to be sold
under the ReSound and GN Danavox brand names.
The GN Great Nordic Group, headquartered in Denmark, is a global
communications company with special focus on tele/data communications
products and services and audiological products. In 1998, the GN Great
Nordic Group had revenue of approximately $604 million.
In a joint statement, Russell Hays and Jesper Mailind, ReSound's and GN
Danavox's chief executive officers, respectively, noted that the benefits of the
proposed merger offer significant opportunities for growth and achievement
in the worldwide hearing health care environment.
"ReSound and GN Danavox are an excellent strategic fit. Our combined
ability to offer truly meaningful solutions to our end users to improve not
only hearing but human interaction is strengthened considerably. We believe
the combined companies will gain significant advantages together: stronger
and broader distribution channels, a more robust manufacturing capability,
and an increased, more solid product development pipeline," said Hays.
Mailind stated, "GN Danavox expects to benefit from the merger through
enhanced revenue growth and strengthened worldwide market presence. The
combined company will be well-positioned to capitalize on our key synergies
to become a leading hearing health care company."
Upon consummation of the merger, Russell Hays will continue as president
and chief executive officer of the combined company for an interim period
and then will be succeeded by Jesper Mailind, who is the current GN
Danavox president and chief executive officer. During the interim period,
Mailind will be executive vice president and chief operating officer of the
combined companies.
GN Acquisition Corporation expects that the necessary filings with the
Securities and Exchange Commission in connection with the tender offer will
be made within the next several days and that offer documents will be mailed
to ReSound shareholders promptly thereafter.
Gleacher & Co. LLC advised GN Great Nordic and is acting as dealer
manager for the tender offer. BancBoston Robertson Stephens advised
ReSound and provided a fairness opinion to the board of directors of
ReSound.
This news release contains forward-looking statements including statements
concerning the projected impact of the proposed merger on earnings results
and sales growth. These statements are based on current expectations; actual
results may differ materially. Among the factors that could cause results to
differ materially are the following: the effect of business and economic
conditions; the ability to manage successfully the integration of the two
companies and realize the expected synergies; the impact of competitive
products and continued downward pressure on prices; market acceptance
issues, including the failure of new products to generate anticipated sales
levels; difficulties or delays in receiving required governmental or regulatory
approval; the cost and effect of legal and administrative proceedings; and the
other risk factors reported in ReSound's filings with the Securities and
Exchange Commission.
Copyright 1999, Business Wire
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