Mass executive firings and subsequent turmoil have raised eyebrows and left Starkey Hearing Technologies in a vulnerable position, industry observers say.
Starkey's highly competitive and mostly foreign competitors certainly see an opening to gain market share — and also a possible window for acquisition.
CEO Bill Austin has said in the past that the company is not for sale, but Lisa Clive, an analyst for Bernstein in Great Britain, said recent upheaval "increases chances that [Austin] would entertain discussions about a takeout — and all the hearing aid players would take a look at Starkey."
Since September, Starkey has terminated longtime Starkey President Jerry Ruzicka and more than a half dozen other top managers. This month, federal agents executed search warrants on the homes of Ruzicka and one other former executive, though Ruzucka's lawyer said he's not aware of any specific allegations of wrongdoing.
The company, of which Austin owns 91 percent, has yet to announce executive replacements. Austin said in statements that he cannot comment because of ongoing investigations, but added that it's "business as usual" at Starkey.
That hasn't stopped speculation about the company's options. Starkey holds a strong competitive position, and Clive said a sale could fetch $1 billion to $1.5 billion.
For one, Starkey controls 17 percent of global hearing aid sales, with 65 percent of its business in the United States. More important, Starkey is the only major player headquartered in the United States.
The $4.6 billion hearing aid industry is competitive and growing. It is expected to reach $5.4 billion in five years.