Hearables boom prompts Varta IPO

November 04, 2016 // By Peter Clarke
Microbattery maker Varta AG (Ellwangen, Germany) is planning an initial public offering of shares on the Frankfurt Stock Exchange to raise €200 million (about $222 million).

Varta is seeking to monetize the growing trend towards in-ear audio that requires microbatteries; both for headsets for smartphones and computers and for hearing aids for the increasingly large older population. The company will reinvest the money raised via the IPO in larger and more efficient manufacturing as well as selective acquisitions.

Varta AG and its primary operating subsidiaries, Varta Microbattery GmbH and Varta Storage GmbH, are 100 percent owned by the Montana Tech Components Group, but are not the sole owners of the Varta trademarks, the company said. The IPO will be conducted by the issuance of new shares in the company but Varta AG did not indicate how many shares would be issued or by how much MTC's ownership would be diluted.

Johnson Controls Hybrid and Recycling GmbH – previously Varta Automotive GmbH – and Varta Consumer Batteries GmbH & Co. KGaA – currently part of the Spectrum Brands Group – continue to hold trademark rights for automotive, partly industrial and consumer batteries, respectively. 

Varta AG specializes in microbatteries and focuses on the production of hearing aid microbatteries and microbatteries for entertainment electronics and industrial applications, which include, in particular, wireless premium headsets. In energy storage the group focuses on the development, system integration and installation of stationary lithium-ion energy storage systems for residential and commercial customers.

The offering to buy shares is being made to the public in Germany and Austria and private placements outside Germany and Austria. The money raised will be used for the building of a large-scale, automated battery assembly plant and for select company acquisitions in the energy storage sector, Varta said.

The demand for cells for in-ear headsets is expected to increase from 15 million cells in 2015 to 83 million cells in 2020, corresponding to a CAGR of 41 percent. In addition, hearables are expected to be the fastest growing wearable device market, growing to approximately $18 billion by 2020.