Kohlberg Kravis Roberts has agreed to back a spin-out of Japanese electronics firm Pioneer Corporation’s DJ equipment division, which will become a stand-alone company with the provisional name of Pioneer DJ.
Under the agreement, KKR will invest around ¥59 billion ($551 million) from its Asia Fund II for an 85.05 percent stake in the new company. Pioneer will retain the other 14.95 percent of the business.
A source with knowledge of the deal told Private Equity International that KKR would be investing primarily from its Asia Fund, with additional equity from other, undisclosed funding sources. The debt-to-equity split is unclear.
KKR declined to comment on the deal.
According to a joint statement, Pioneer’s DJ division – which develops, manufactures and sells DJ equipment, including DJ players, mixers, controllers, headphones, and speakers – is “a leader in the DJ equipment market with strong brand image, reputation for technological differentiation, and high profitability.”
In a separate announcement, Pioneer said it would continue to “pursue selection and concentration” of its non-core businesses, in order to focus on its primary Car Electronics business.
In June, Baring Private Equity Asia said that it had teamed up with Osaka-based audio equipment maker Onkyo Corporation to buy Pioneer’s home audio-visual business, for an undisclosed sum. The deal combined the home AV component businesses of Onkyo and Pioneer, with both Onkyo and Baring acquiring shares in the Pioneer division. Baring was set to hold 51 percent of the business.
This is the second investment KKR has made in Japan from KKR Asia Fund II, which closed last July on $6 billion. The first was a ¥165 billion ($1.67 billion) buyout of Panasonic Healthcare, the healthcare unit of Japanese conglomerate Panasonic, in March. The deal gave KKR an 80 percent majority stake, with Panasonic retaining a 20 percent interest in the business.
Separately, KKR has also completed its acquisition of Singapore-listed packaging and logistics solutions provider Goodpack, a $1.1 billion buyout announced in May. The deal was financed with between $600 million and $650 million of underwritten debt from Credit Suisse, Goldman Sachs and Morgan Stanley, according to a Thomson Reuters report at the time. Goodpack was delisted from the Official List of the Singapore Exchange Securities Trading Limited on 15 September, according to a joint statement from Goodpack and KKR.