First unpublished rumours, then Reuters news stories, and finally a huge amount of industry intelligence has led us to this point. Many names were in the pot, but it turns out that one important name wasn’t even thought about, and that’s Pioneer themselves. But the news is officially out — Pioneer DJ is now in the hands of private equity firm KKR & CO, but with Pioneer Corp still involved. And to be 100% clear — it’s KKR, not KRK. So no, Gibson has not bought Pioneer OK?
Reading the first Reuters news story gives the impression that Pioneer Corp has simply bought Pioneer DJ, which on the face of it is true, but the press release from KKR themselves sheds more light on the deal:
Pioneer and KKR Agree to Pioneer DJ Share Purchase
– Companies to form partnership to accelerate global growth –
TOKYO & KAWASAKI, Japan–(BUSINESS WIRE)– Pioneer Corporation (“Pioneer”) and KKR today announced the signing of a share purchase agreement under which Pioneer’s business division that engages in the development, manufacturing and sale of DJ equipment will be spun off into a new company, Pioneer DJ*, which will be jointly owned by Pioneer and KKR.
(*provisional name)Based on this agreement, KKR will acquire all of the outstanding shares of Pioneer DJ via holding company PDJ Holdings Co., Ltd. (“PDJHD”) for approximately JPY59 billion (approximately US$551 million at the exchange rate of US$1=JPY107). Pioneer will then acquire newly issued shares in PDJHD with the result that PDJHD will be owned 85.05% by KKR and 14.95% by Pioneer.
Pioneer’s DJ equipment business develops, manufactures, and sells equipment for DJs, including DJ players, mixers, controllers, headphones, and speakers. It is a leader in the DJ equipment market with strong brand image, reputation for technological differentiation, and high profitability.
Pioneer and KKR will jointly leverage their respective business resources, brand power, and technological capability, as well as global-technology and media-industry investment experience, and networks for the further growth of Pioneer DJ.
Susumu Kotani, Representative Director, President and CEO of Pioneer, said, “As we accelerate our efforts to concentrate management resources on our car electronics business, Pioneer has been seeking the optimal partner to further the globalization of our DJ equipment business and expand the brand. We are pleased to have reached an agreement with KKR on the purchase of Pioneer DJ. KKR has a wealth of experience in the technology and media industry globally, and we are confident it has the expertise to drive Pioneer DJ forward. Pioneer will retain 14.95% of the voting rights in Pioneer DJ and we will maintain a framework for cooperation to ensure the future growth of the company.”
Hirofumi Hirano, Member of KKR and CEO of KKR Japan, said, “Pioneer has built a leading global DJ equipment business based on its powerful brands and excellence in matching product development to market requirements. KKR will work together with Pioneer DJ’s innovative management team and employees, and our investment partner Pioneer, to support further long-term growth of the business.”
Yoshiaki Ide, Executive Officer and Division Chief Officer of Pioneer’s Pro. Sound & Visual Business Division, said, “KKR’s global investment activities support the growth of businesses in a range of industries, including those in the technology and media sectors. As such, we believe this partnership will enable the further expansion of our own business. With KKR’s support, Pioneer DJ aims to add further customer value and exceed expectations with accelerated product development and enhanced service. In addition, Pioneer, as an important shareholder, will provide ongoing support.”
Subject to approval by the relevant authorities and other customary closing conditions, the above agreements are expected to be completed by March 2015.
UPDATE: Press release directly from Pioneer too:
Pioneer and KKR announcement of the new Pioneer DJ Corporation*
(*provisional name)
Dear valued customers:
Thank you very much for your continuous interest and use of Pioneer DJ equipment.
As reported in our press release of September 16, Pioneer Corporation (hereinafter “Pioneer”) and Kohlberg Kravis Roberts (hereinafter KKR) is now proceeding with establishment of a new company tentatively named as “Pioneer DJ Corporation” hopefully by next March so that development, production and sales of our DJ equipment and related devices will be further enhanced.
KKR’s global investment activities support the growth of businesses in a range of industries, including those in the technology and media sectors. As such, we believe this partnership will enable the further expansion of our own business. Pioneer and KKR will jointly leverage their respective business resources, brand power and technological capability, as well as global-technology and media-industry investment experience, and networks for the further growth of Pioneer DJ.
In a new structure, we will continue to use “Pioneer DJ” brand and serving a wide range of DJs by developing innovative products not only for professionals but also for home-use.
We sincerely appreciate your continuous support and interest in the Pioneer DJ brand.
Lastly, we humbly hope that the new Pioneer DJ can live up to your expectations.
Yoshiaki Ide
Executive Officer and Division Chief Officer
Pro.Sound & Visual Division
To nutshell this — Pioneer Corporation has sold the assets that run the Pioneer DJ brand (it is not a company as such right now) to KKR. They in turn will create a new company provisionally called Pioneer DJ, will then issue shares, 85.05% of which will be owned by KKR, and the other 14.95% will be in the hands of Pioneer Corporation. Clear?
Pioneer DJ was never a strictly a company, but now it is, with the same people involved, the same great products being put out, and everything on the face of it remaining as it is now. Time will tell how much remains the same, as such huge moves often mean changes, but it’s way too early to speculate on that one. But I would expect that having fresh money involved and a renewed purpose, Pioneer DJ will move onwards and upwards.
But as far as you’re concerned, it’s business as usual.