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October 18, 2002

SLC's Sonic Innovations Buys Two Canadian Companies

From: Salt Lake Tribune, UT
Oct. 18, 2002


A Salt Lake City hearing-aid manufacturer made its move into Canada this week with the acquisition of two companies.
Sonic Innovations, which designs, manufactures and markets digital hearing-aid components, purchased Sentech Systems of Ontario and Orsonique of Quebec. Terms of the deals were not released.

"We bought them because they have a lot of customers and lots of distribution [and] because we can push out our products" through their distribution systems, Sonic Innovations president and chief executive Andy Raguskus said. "[The acquisitions] take us from zero presence to a nice percentage of the Canadian market."
Jeffrey Geigel, formerly a business development consultant for the company, will oversee the Canadian operations. However, the previous owners of Sentech and Orsonique will continue to manage the businesses.
First Albany Corp. analyst William Plovanic said the entry into the Canadian market seems "like a step in the right direction" to increase Sonic Innovations' revenue and profits.
However, he stopped short of drawing any conclusions because the financial information on the companies and the purchases were not made public.
Raguskus said the purchases were in line with the company's goal to expand its presence worldwide.
"In the last year and half, we have made seven acquisitions, all international, all for distribution. That indicates a strategy that is likely to continue," he said.
Sonic Innovations began shipping its digital hearing aids and components in 1998. The first product, the Natura hearing aid, was built around technology developed by Douglas Chabries, dean of Brigham Young University's College of Engineering and Technology. Chabries collaborated with researchers Thomas Stockham and Carver Mead to create the technology that allows for personalized tuning that approximates the using of a graphic equalizer to adjust a stereo.
The company, with 170 employees in Salt Lake City, now offers four families of hearing aids and more than 40 products.
In 2000, a group of shareholders sued the company in U.S. District Court in Salt Lake City, alleging Sonic Innovations had concealed problems with its largest customer to ensure the success of its initial public offering. The lawsuit has not been resolved.
Sonic Innovations shares closed at $4.49 Thursday, recovering all but a cent of the dip the stock took in Wednesday's trading.

© Copyright 2002, The Salt Lake Tribune