Onkyo has signed a preliminary agreement to sell the AV division of Voxx International and Sharp
We recently talked about the difficult fate of Onkyo – the company was desperately looking for buyers, but deals were constantly thwarted. The fourth is on the way: this time the buyer of Onkyo is the alliance of Sharp and Voxx International – the companies have already signed a preliminary agreement to sell the home audio-video division, which includes brands such as Onkyo, Integra, Pioneer and Pioneer Elite.
Onkyo has a close partnership with Voxx International, distributing Onkyo and all of its brands in the US market, and has announced plans to increase the visibility of brands overseas in the US by increasing distribution and launching new devices. At one time, Onkyo became the exclusive Japanese distributor of the Klipsch brand, owned by Voxx International.
The purchase partner was the Japanese company Sharp, whose Malaysian factories have been producing Onkyo devices for a long time. Moreover, under the preliminary agreement, Onkyo has no right to look for other buyers until Voxx International and Sharp refuse to buy.
The full deal will come into force if the partners sign not a preliminary, but a full purchase agreement no later than May 20. Then, if all parties can agree, the deal will be approved by Onkyo shareholders – their meeting is scheduled for June 25th.
Usually, such large purchases are not carried out so quickly, but Onkyo is running out of time: due to debts, the company’s shares may be removed from the Tokyo stock exchange, and a meeting on this issue is scheduled for the end of July. Pat Lavelle, head of Voxx International, hopes that things will be resolved as soon as possible.
According to the Nikkei portal, Onkyo’s home audio-video business generated the majority of its profits at 53%. It is unclear how the company will survive after the sale. Recently, Onkyo announced plans to develop OEM production of equipment, which was previously profitable on a par with the AV division, but has declined somewhat in recent years.
For example, the European division of Pioneer Onkyo Europe, which was previously engaged in the distribution of equipment, after the transfer of distribution to Aqipa was to be engaged in the sales of the products of the revived OEM division. But at the end of April, Onkyo completely closed the office.
So far, the cost of Onkyo’s deal with Voxx International and Sharp is unknown. But, for example, Sound United in 2019 could buy Onkyo’s AV division for about $73 million.
