Premium Audio Company LLC. buys Onkyo Home Entertainment Corporation
VOXX International Corporation said it had signed an asset purchase agreement to acquire the audio and video business of Onkyo Home Entertainment Corporation through its subsidiary Premium Audio Company LLC. and jointly with Sharp Corporation.
Now it has actually happened: Premium Audio Company LLC. is acquiring Onkyo Home Entertainment Corporation, a subsidiary of VOXX International Corporation, which is carrying out this takeover together with Sharp Corporation.
At the beginning of May 2021, initial information became known that VOXX International Corporation was interested in taking over Onkyo Home Entertainment Corporation. This was quite surprising, since Sound United LLC. had already tried to take over Onkyo Home Entertainment Corporation before, but ultimately failed – we reported.
Premium Audio Company LLC. acquires Onkyo Home Entertainment Corporation for $30.8 million.
The price for the acquisition is reported by VOXX International Corporation to be as high as $30.8 million, as well as the assumption of certain unspecified liabilities. In addition, according to the company, future commissions on certain sales would have to be paid, but again, no details are given.
The acquisitions are not quite complete yet, however, as the proposed transaction is still awaiting shareholder approval, but that will take place at Onkyo’s annual general meeting scheduled for 25 June 2021.
Under the agreement, substantially all of the assets of Onkyo’s audio and video business will be transferred to Premium Audio Company LLC.
Sharp Corporation and VOXX International Corporation form joint venture
VOXX International Corporation and Sharp Corporation plan to form a new joint venture that will be responsible for Onkyo Home Entertainment Corporation-related agendas.
Upon completion of the proposed transaction, the intellectual property, trademarks, development and manufacturing rights would be transferred to it. If this transaction is consummated, Premium Audio Company LLC. would be responsible for all sales, marketing and distribution of Onkyo and Integra branded audio and video products, while Sharp would be responsible for manufacturing, which is currently done in Malaysia.
The company says that distribution of Onkyo and Integra audio and video products will be done through Premium Audio Company LLC’s newly formed subsidiary, 11 Trading Company, in the Americas and through Klipsch, a wholly owned subsidiary of VOXX International Corporation, in all other regions worldwide.
Upon completion of the acquisitions, the business will be managed by Paul Jacobs and the Klipsch management team.
Pioneer and Pioneer Elite not part of the deal
The Pioneer and Pioneer Elite audio and video brands, currently licensed from Onkyo and sold through 11TC, are not part of the asset purchase agreement now in place, although the parties have signed a letter of intent to formalise a new agreement.
“This acquisition is a great addition to our Premium Audio Company. Since entering into our distribution relationship in July 2020, we have seen strong demand for both Onkyo and Integra products. Sharp, our partner in this venture, brings world-class manufacturing capabilities and together with our distribution partners and strong customer relationships, we believe we can grow this business significantly in the coming years. Although we expect growth to continue this year, should the transaction be approved, it will take some time to ramp up manufacturing lines and source parts, which is a challenge for the industry as a whole. That said, we believe we will recover global sales in the coming years, resulting in strong sales growth and improved profitability.”Pat Lavelle, President and Chief Executive Officer of VOXX International Corporation
Getting to the point
Now it has happened after all: VOXX International Corporation is taking over Onkyo Home Entertainment Corporation in partnership with Sharp Corporation and through its subsidiary Premium Audio Company. While a new joint venture between VOXX International Corporation and Sharp Corporation called 11 Trading Company will be responsible for the marketing of Onkyo and Integra brand solutions in America, this task will fall to Klipsch internationally and thus also in Europe. It is interesting that this agreement does not yet include the Pioneer and Pioneer Elite brands.
|Manufacturer:||VOXX International Corporation|
|Distribution:||VOXX International Corporation|