LONDON, Oct 6 (Reuters Breakingviews) – Denmark’s GN Store Nord (GN.CO) is placing a pricey wager on youth. The $9 billion maker of pensioner-focused hearing aids on Wednesday announced it was shelling out 8 billion Danish crowns ($1.3 billion) for SteelSeries, which makes fancy headsets popular with young gamers.
Copenhagen-listed GN could do with a boost. The company on Tuesday downgraded revenue growth forecasts for its core hearing aid unit, citing delays in product launches. Over the past year, shares have lagged those of Italian hearing aid retailer Amplifon, which last month announced punchy sales growth targets.
GN’s appetite for the deal is clear. SteelSeries made 1.3 billion crowns of revenue in the first half of 2021, implying that its enterprise value is 3.1 times full-year sales. That’s a chunky premium to U.S. rivals Corsair Gaming (CRSR.O) and Turtle Beach (HEAR.O), which trade in line with their estimated revenue this year, according to forecasts compiled by Refinitiv. GN is banking on technological and supply-chain synergies to make up the difference, and with shares bouncing 5% on Wednesday morning, investors seem willing to lend a sympathetic ear. (By Oliver Taslic)
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Editing by George Hay and Amanda Gomez
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