(Bloomberg) -- Amplifon SpA, the Italian hearing-aid specialist that runs its own network of retail stores, is eyeing possible acquisitions in the US as the country’s population ages, Chief Executive Officer Enrico Vita said.
“We want to be at the forefront of consolidation in a global market that’s still fragmented,” Vita said in an interview in Milan, where the company is based.
The US and the rest of North America, which together account for about 40% of worldwide hearing-aid sales of around $17 billion, are a “top priority” for Amplifon as it sets its merger-and-acquisition strategy for the coming years, though Europe is also still a target, the CEO said.
But with favorable demographics and scope for consolidation, the US could be the best bet for future moves, Vita said, adding that “baby-boomers are now checking in with us as potential customers.” Amplifon isn’t actively engaged with any potential targets in the US at the moment, the CEO said.
“Over the last six years we’ve invested more than €1.5 billion ($1.6 billion) in acquisitions,” the CEO said, and the company plans to continue spending about €100 million per year for small deals.
“In 2023 we want to play offense, we see inflation-driven uncertainty as an opportunity to grow,” Vita said.
Amplifon has been active on the deal front since Vita, 53, took over in 2015. The 2018 acquisition of Spain’s GAES Group helped boost global market share to 11%, and the company followed up with the purchase of Bay Audio Pty Ltd.
Amplifon reported revenue of more than €500 million and earnings before interest, taxes, depreciation, and amortization of around €109 million in the third quarter of this year, beating analyst estimates.
Still, there are challenges ahead for the family-owned company, which was founded after the second world war to serve veterans suffering from hearing loss.
China, where Amplifon expects to generate around 10% of sales in coming years, remains a complex market, Vita said, while the company foresees heightened competition from low-cost providers like Costco Wholesale Corp. in the US.
“There’s enormous room to grow as our competitors are still small,” Vita said, adding that scaling up would give Amplifon more margin for error than some rivals.
“When you reach a certain size you can afford to make mistakes and even think of potentially losing some money while you’re innovating,” Vita said.
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