United States investment fund Kohlberg Kravis Roberts (KKR) and Pioneer Electronics have entered into negotiations to sell the world’s largest DJ equipment company Pioneer-DJ.
Ownership of Pioneer DJ
Previously, in 2015, Pioneer created a subsidiary company called Pioneer DJ. This allowed them to create a 2015 deal with investment firm KKR & Co. As a result of the deal, KKR & Co. owns 85% of Pioneer DJ. Meanwhile, Pioneer held onto the remaining 15% of the company. Both parties are now considering offloading the entire Pioneer DJ stock to new buyers. In fact, bidding has already begun. The expected sales price is estimated at between 60 billion to 70 billion yen. In US currency, that translates to upwards of $500 million.
The CDJ-2000, a CD player designed by Pioneer DJ. A DJM-800 mixer is also seen in the middle.
Revenue
Pioneer DJ’s sales amounted to around 25 billion yen in 2018. Their earnings before interest, taxes, and amortization was nearly 6 billion yen.
In US currency that accounts to sales of over $200 million. The company holds a high share of the major US and European markets. Demand in other countries is also expected to grow in the future. With the introduction of major new products, sales in the fiscal year 2020 are expected to be around 30 billion yen. Another important point, Pioneer DJ controls between 60 and 70% of the global share in DJ mixers, turntables and other products.
Issues with parent company
However, Pioneer’s parent company got into a management crisis. Currently, the company is restructuring. Recently, Baring Private Equity Asia, a Hong Kong buyout firm, bailed out Pioneer to the tune of $930 million. As a result, Pioneer laid off 3,000 employees. That amounts to 15% of Pioneer Corporation’s total workforce. Now, Pioneer hopes to rebuild itself from the revenue from the sale of Pioneer DJ.
New equipment
Pioneer DJ recently dropped both the SQUID 16-track hardware sequencer and DDJ-800 controller in April. In fact, this gear remains an industry standard of DJ booths worldwide. These are not exactly the types of products you would expect to see a company release if they were not doing well.
Squid 16-track hardware sequencer
The SQUID will control workflow and give users the chance to develop new styles of music. This is because users can create unique sequence patterns and phrases at the touch of a button. It allows a user to connect, sync and simultaneously control up to 16 instruments via its multiple input/outputs. Another thing, the terminals are compatible with various equipment, from your DAW and hardware instruments to modular synths, vintage synthesizers, and drum machines.
The layout and controls are effortless to navigate. For instance, this production tool enables users to randomize sounds, sequences, and drums in key. They can also access endless polyrhythmic-looping options and instantly change the playback direction and speeds.
DDJ-800 Controller
The DDJ-800 2-channel DJ controller is a pro DJ setup that is made to go wherever you do. This portable unit inherits the club-style layout and popular features of the DDJ-1000, including Color On Jog Displays, and packs it all into a lighter body. The result is a professional performance controller that you will have no trouble transporting between gigs at weddings, parties and anywhere else you play.
Recruiting Acquirers
KKR and Pioneer have already begun bidding to recruit acquirers. The deadline for the first bid will end at the end of the Golden Week.
