Sonova Announces the Acquisition of Advanced Bionics Corporation Expanding Its Position as the Leading Provider of Hearing Healthcare Solutions

http://www.businesswire.com/news/home/20091108005055/en

STÄFA, Switzerland--(Business Wire)--
Sonova Holding AG (SIX:SOON), the world's leading provider of hearing systems,
announced today that it has entered into a share purchase agreement with the
shareholders of Advanced Bionics Corporation, Los Angeles, USA. Advanced Bionics
is a global leader in developing and manufacturing cochlear implant systems. The
purchase consideration of USD 489 million will be fully paid in cash. Subject to
regulatory approvals, the transaction is expected to close within the coming
three months.

Highlights of the transaction:

* Sonova becomes the first global hearing healthcare company with a strong
worldwide presence in hearing instruments and cochlear implant systems
* Sonova enters into the high growth market of cochlear implant systems with
expected market growth rates of 10-15% p.a.
* Sonova`s strong commitment to innovation will boost Advanced Bionics` position
as an innovation leader in the cochlear implant industry
* The Sonova Group targets to improve the performance of Advanced Bionics,
doubling sales and increasing EBITA margin to 20% or beyond within the coming
three to five years
* With all cash consideration of USD 489 million plus transaction costs of CHF
10 million totaling CHF 510 million at current exchange rates, the transaction
is expected to be accretive to earnings per share (EPS) before
transaction-related amortization in the second full year after closing

Sonova - the hearing healthcare company

The acquisition represents a strategic expansion into the area of cochlear
implants for the Sonova Group, leveraging the Group`s leading position as a
global provider of hearing systems.

"With this transaction Sonova adds a new source of sustainable business growth
and enhances its position as the leading provider of hearing healthcare
solutions", said Valentin Chapero, CEO of the Sonova Group. "With all its brands
Sonova will offer the most comprehensive and innovative product and service
portfolio covering any customer need for most types of hearing problems."

Advanced Bionics will remain an independent business unit within the Group but
will share all the integral elements that have been driving the success of
Sonova over the last decade: Global sales coverage, outstanding service
orientation, world class supply chain, a high innovation rate and a strong
implementation culture.

Advanced Bionics - a leading company in cochlear implant systems

Advanced Bionics is one of the global leaders in the development, manufacturing
and distribution of cochlear implant systems with revenues of USD 117 million in
2008. Founded in 1993 and backed by renowned innovator Al Mann, the company is
present in over 30 countries and has become the global number two with an
estimated share of approximately 18% of the cochlear implant market. Cochlear
implants are surgically implanted devices that restore hearing for people with
profound hearing loss. A cochlear implant system consists of an external
processor that captures and converts sound into detailed digital information, a
magnetic headpiece that sends the signal to the implant, and an electrode,
implanted directly in the cochlea, that delivers electrical signals to the
hearing nerve. The hearing nerve sends impulses to the brain, where they are
interpreted as sound.

Financing of the transaction

The transaction will be financed with a combination of existing cash of the
Sonova Group amounting to CHF 40 million and an underwritten senior credit
facility of CHF 470 million. The senior credit facility will be made in two
tranches, a CHF 240 million amortizing loan with a term of 3 years and a CHF 230
million term facility with a term of 5 years. Credit Suisse, UBS and Zürcher
Kantonalbank have underwritten the syndicated credit facility as mandated lead
arrangers. The acquisition is subject to regulatory clearances.

Sonova also announces that it is terminating the share buy-back program for up
to 10% of its share capital which started on September 20, 2007 with immediate
effect. A total of 2,113,500 registered shares with a nominal value of CHF 0.05
have been repurchased at an average price paid per share of CHF 94.98,
corresponding to 3.15% of share capital when the buy-back program was launched.
The value of the shares repurchased was CHF 200.7 million. The repurchase was
carried out via a second trading line on the SIX Swiss Exchange AG set up
especially for the share buy-back. The General Shareholders` Meeting of 2009
agreed a capital reduction via the cancellation of the 718,500 registered shares
which had not yet been cancelled.

Significant value creation

Sonova shareholders are expected to benefit from value creation through a
combination of accelerated growth and financial improvements at Advanced
Bionics. Sonova aims to significantly increase Advanced Bionics` market share in
this high growth market.

Advanced Bionics will benefit from Sonova`s high-performance hard- and software
platforms and the Group`s existing technologies that are complementary to the
cochlear implant industry. This transaction will enable significant innovation
by applying state-of-the-art acoustics and mechanical engineering know-how,
implementing advanced audiological algorithms and simplifying the fitting
process. The combination of Advanced Bionics` superior nerve stimulation
approach and Sonova`s thorough understanding of the acoustical challenges of
profound hearing loss will result in highly innovative products that deliver the
best possible hearing for cochlear implant patients.

In addition to the product and technology related benefits, Advanced Bionics
will be supported by the global sales organization of Sonova achieving a
significant enhancement of its international distribution and service
capabilities. Patients, customers and partners of Advanced Bionics will not only
benefit from the improved product features and the expanded global presence, but
also from the stability and continuous innovation that Advanced Bionics will
enjoy as part of the Sonova family.

Together with Sonova`s operational management capabilities, there is significant
potential to improve the financial performance of Advanced Bionics and to assure
its long-term success. Sonova aims to double the revenue of Advanced Bionics
within the next three to five years and to increase its EBITA margin to 20% or
beyond.

Based on information available today, the current business plan and financing
structure, the transaction is expected to be accretive to earnings per share
(EPS) before transaction-related amortization in the second year after closing.
The company expects to pay down its debt based on its continuous strong free
cash flow generation.

"Over the last months, a significant number of people from both companies have
been working with each other. We all felt that this is the ideal combination and
that together we will be able to achieve great things - especially for the
benefit of hard-of-hearing people", said Valentin Chapero. "Sonova`s management
is looking forward to working closely with the team at Advanced Bionics to
unlock the company`s significant potential."

Timetable and key corporate dates

9 November 2009 Analyst & media presentation at 10:00 CET with Valentin Chapero, CEO, and Oliver Walker, CFO
Audio web cast of the presentation on www.sonova.com
Conference call on +41 91 610 5600, +44 20 7107 0611 (UK),
+1 (1) 866 291 4166 (USA)
10 November 2009 Sonova Half-year results 2009/10 publication
Around February 2010 Expected closing of transaction

Disclaimer

This Media Release may contain forward-looking statements which offer no
guarantee with regard to future performance. These statements are made on the
basis of management`s views and assumptions regarding future events and business
performance at the time the statements are made. They are subject to risks and
uncertainties including, but not confined to, future global economic conditions,
exchange rates, legal provisions, market conditions, activities by competitors
and other factors outside the company`s control.

This is Sonova

Sonova is the leading provider of innovative hearing healthcare solutions. The
globally active group is the world's top manufacturer of hearing systems, the
market leader in wireless communication systems for audiology applications and a
provider of professional solutions for hearing protection. Sonova is pursuing a
clear growth strategy and is intent on building its market share. To this end it
is constantly expanding its existing business segments and branching out into
other areas of the hearing healthcare industry.

Present in over 90 countries, and with a workforce of over 5,300 employees,
Sonova generated sales of CHF 1.249 billion in the financial year 2008/09 and a
net profit of CHF 284 million. This financially strong group of companies bases
its success on innovation, customer focus and proactive cost management.

The company has been successfully promoting understanding and communication for
over 60 years, and is ideally positioned to benefit from the trends in this
growth industry.

For more information please visit www.sonova.com.

Sonova shares (ticker symbol: SOON) have been listed on the SIX Swiss Exchange
since 1994.

About Advanced Bionics

Advanced Bionics Corporation is a global leader in developing the most advanced
cochlear implant systems in the world. Founded in 1993 and headquartered in
Valencia, Calif., AB is the only American company developing cutting-edge
cochlear implant technology that restores hearing to the deaf and allows
recipients to hear their best today, tomorrow, and always.

AB has the most sophisticated cochlear implant system on the market, the Harmony
HiResolution Bionic Ear System, with five times more sound resolution than its
competitors, designed to allow recipients to go beyond deciphering simple speech
to hearing music. With sales in over 30 countries and a proven track record for
developing high-performing, state-of-the-art products, AB`s talented group of
over 600 technologists and professionals from all over the world are driven to
succeed, work with integrity and stay firmly committed to quality.

For more information please visit www.advancedbionics.com.

Sonova
Dr. Holger Schimanke, +41 58 928 33 44
Director Investor & Corporate Relations
holger.schimanke@sonova.com
or
Gina Francioli, +41 58 928 33 47
Investor & Corporate Relations
gina.francioli@sonova.com

Copyright Business Wire 2009