Amplifon, the world’s largest hearing-aid retailer and a sustainability leader in health care, announced last week that it is acquiring GAES, a Spanish producer and distributor of hearing-aids.  

This is exactly the kind of deal we would expect from Amplifon, a European mid-cap company whose shares are up almost 50% since the start of the year. The deal catapults the company into the leading position in the Spanish market and adds useful manufacturing capabilities at the same time.

Amplifon – significant growth of point of sales in Iberia

Source: Amplifon AR 2017 and post-acquisition conference call, Kames Capital


Yet, the global hearing-aid retail market remains highly fragmented, with around 50% made up of independent stores and another 22% of speciality chains. Clearly, there is an opportunity for larger players to further consolidate the market and reap the benefits of greater scale. This acquisition should help Amplifon in this respect and will see the company’s worldwide market share reach around 11%, increasing its global leadership.

GAES fits the mould for Amplifon, being a privately-owned ‘national champion’ in Spain and therefore a useful asset as Amplifon seeks to broaden its footprint. As the company continues to grow in size, its ability to develop its brand awareness increases, attracting more customers and supporting further market share gains.

At the same time, the size of the group makes it a significant purchaser of hearing aids in a global context, giving it considerable buying power and offering a key opportunity for purchasing synergies to be realised.

All of this makes the acquisition of GEAS and other similar chains highly attractive for Amplifon, and with comparable opportunities in other markets likely to present themselves over time, it appears that the company is in an excellent position to capitalise on its leading position in a structurally growing segment of the market.

Opinions and views from the Equities team at Kames Capital are not an investment recommendation, research or advice and should not be considered as such. Content discussing investment strategies and stocks is derived from and solely relates to the investment management activities of Kames Capital.

About the author

Allan Clarke is an investment analyst in our Equities team and is responsible for generating investment ideas for our European and global equity funds. He joined us in 2015 from PricewaterhouseCoopers, where he was a Manager in the Valuations team that specialises in the valuation of private companies and other unlisted assets. He has 12 years’ industry experience*. Allan has a first class honours degree in Business Studies and Accountancy from the University of Edinburgh and is a Chartered Accountant.

*As at 30 June 2018.

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