KKR completes Japanese DJ equipment division purchase

The financial details of the transaction were not disclosed but the deal was previously reported to be worth about JPY59 billion ($551 million). Under the terms of the deal KKR and Pioneer now own 85.05% and 14.95%, respectively.

The investment is KKR's first in Japan since it completed the acquisition of an 80% stake in Panasonic's healthcare business the previous April for JPY165 billion. That deal, which was agreed in October 2013, also saw the seller retain a minority interest in the operation.

Pioneer's DJ equipment business manufactures equipment including DJ players, mixers, controllers, headphones, and speakers. It claims to be a market leader with a strong brand image, a reputation for technological differentiation, and high profitability.

The DJ equipment business is part of Pioneer's home electronics division, which posted sales of JPY108 billion for the year ended March 2014, up 12.6% year-on-year. Although sales of optical disc drive-related products declined, overall sales rose due to a combination of currency depreciation and increased sales of DJ equipment and equipment for cable TV systems.

Overall sales at Pioneer came to JPY498.1 billion, up from JPY451.8 billion the previous year. However, the company has struggled in certain parts of its business, posting a net loss of JPY19.5 billion in 2013 due to restructuring costs and poorly performing investments. The company returned to profit in 2014, but only just - net income came to JPY531 million.

"Pioneer DJ has built a leading position in the market based on its powerful brands and excellence in matching product development to market requirements," said Hiro Hirano, CEO of KKR Japan. "Over the long term, by working together with Pioneer DJ's innovative management team, employees and Pioneer, KKR can provide support for the further growth and global expansion of the company."

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