Reuters announced today Pioneer DJ has been sold to KKR & Co.
"(Reuters) - Japan's Pioneer Corp (6773.T) is to sell its disc-jockeying audio equipment unit to private equity firm KKR & Co LP (KKR.N) for around 59 billion yen ($550 million), it said on Tuesday, as it outlined a growth strategy centered on its automotive electronics business.
Last week the company said it was also selling its home audio-visual business to audio equipment maker Onkyo Corp (6628.T).
Under the latest deal Pioneer said it would spin off its DJ unit, which makes equipment such as speakers, mixers and turntables, into a separate company called Pioneer DJ that it will then sell to KKR by the end of March next year, leaving it with a 14.95 percent voting stake in the new company.
KKR has already been making inroads into Japan as more companies seek to sell non-core businesses to strengthen their finances and bought
Panasonic Corp's (6752.T) healthcare business last year.
Best known outside of Japan for its audio-visual equipment, Pioneer is now concentrating on its automotive electronics business as its best bet for growth, seeing potential for expansion in emerging markets and the trend toward increasingly connected cars.
"We're trying to transform our auto-related business and are investing a lot into that and realized we had to concentrate our resources," said Chief Executive and President Susumu Kotani at a media briefing held in a Tokyo hotel on Tuesday.
"We realized we wouldn't be able to invest in the DJ business so it would be better to spin it off and grow it independently."
Kotani said that the DJ business was highly profitable, running an operating margin of nearly 20 percent on sales of 21.6 billion yen in the year ended March 31, giving it a 60 percent share of the global market, but further growth in such a niche business would require significant further investment."