Update: VOXX International Corporation (NASDAQ: VOXX), a leading manufacturer and distributor of automotive and consumer technologies for the global markets, announced that its wholly-owned subsidiary, Premium Audio Company, LLC, and Sharp Corporation (“Sharp”) have successfully entered into a joint venture (the “JV”) to acquire certain assets of the audio/video business of Onkyo Home Entertainment Corporation (“Onkyo”). This follows the Asset Purchase Agreement signed by the parties as announced on June 3, 2021.
The proposed transaction was approved by Onkyo shareholders at its Ordinary General Meeting of Shareholders held on June 25, 2021 and was previously approved by Onkyo’s Board of Directors. The total purchase price for the transaction is $30.8 million, plus the assumption of certain liabilities and future payment of commissions to Onkyo on certain product sales. Premium Audio Company will own approximately 75% and Sharp will own approximately 25% of the JV.
Premium Audio Company will handle distribution worldwide and be responsible for all sales and marketing activities. Sharp, though its manufacturing facility in Malaysia, will be responsible for manufacturing. The acquisition will provide the JV with ownership of the brands, intellectual property, engineering, and manufacturing rights of the Onkyo and Integra brands. Further, VOXX International has entered into a new licensing agreement with Pioneer Corporation and per this licensing agreement, Premium Audio Company will market and sell the Pioneer and Pioneer Elite brands worldwide, excluding the Peoples Republic of China.
Pat Lavelle, President and Chief Executive Officer of VOXX International stated, “This is another milestone for VOXX and our shareholders, as we have aligned with a strong manufacturing partner in Sharp, while adding powerful brands, products and engineering capabilities to our Company. It will take time to ramp up production and secure parts, given near-term industry headwinds, but believe this transaction will lead to significant growth and improved profitability in the years ahead. In fiscal 2022, we anticipate net sales of approximately $50.0 million, with upside thereafter as we leverage our distribution domestically and abroad. We look forward to welcoming the Onkyo team to the VOXX family.”
Onkyo Home Entertainment Corporation is a leader in the audio and video home entertainment industry, with one of the most respected names in home theater systems. Onkyo markets and sells a variety of products under the Onkyo and Integra brands in home audio, lifestyle audio, hi-fi components, and speaker systems, all of which VOXX, through the joint venture between Premium Audio Company and Sharp, will now own. Further, licensed products from Pioneer will include audio/video receivers and sound bars for home use and home-theater systems.
Finalization of the transaction is subject to customary and regulatory closing conditions and is expected to be consummated on or before August 30, 2021.
On June 3, 2021 VOXX International Corporation announced the distribution of Onkyo and Integra audio/video products will be executed through the Premium Audio Company’s newly formed subsidiary, 11 Trading Company (“11TC”), in North and South America and through Klipsch, a wholly owned subsidiary of VOXX, in all other worldwide regions. Upon consummation of the transaction, the business will be run by Paul Jacobs and the Klipsch management team.
In July 2020, VOXX, through its newly formed distribution company and subsidiary 11 Trading Company, LLC (“11TC”), became the exclusive distributor in the Americas of the Onkyo, Pioneer, Pioneer Elite, and Integra brands. This built upon and expanded the alliance between the company’s when Onkyo became the distributor of Klipsch premium audio sound solutions in Japan in 2019. For many years, Sharp Corporation has manufactured products for Onkyo at their Malaysian factory as part of a joint venture.
Pat Lavelle, President and CEO of VOXX International Corporation stated, “For the past two years, we’ve worked well with the Onkyo team, expanding our relationship, and most important, serving the needs of our customers. It is our hope that we can reach an agreement shortly as they have strong brands, and through our Premium Audio Group, led by the Klipsch management team, we have widespread distribution and a global infrastructure to support our growth.”
Further adding, “This acquisition is a great addition to our Premium Audio Company. Since we established 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 years ahead. While we anticipate growth this year as well, should the transaction be approved, it will take time to ramp up manufacturing lines and secure parts, which is a challenge for the industry at large. With that said, we believe over the coming years, we will restore worldwide sales resulting in strong top-line growth and improved profitability.”
Klipsch Holding, LLC has been renamed Premium Audio Company, LLC
On Aug. 11, 2020, VOXX International Corporation announced it has changed the legal name of its wholly owned subsidiary from Klipsch Holding, LLC to Premium Audio Company, LLC. This move is a result of the Company’s growing brand portfolio and recently announced distribution alliance with Onkyo & Pioneer Corporation.
Under the new structure, Premium Audio Company, LLC (PAC) contains two subsidiaries:
- Klipsch Group, Inc. – which includes the Klipsch, Jamo, Energy, and ProMedia speaker brands;
- 11 Trading Company, LLC (11 TC) – the newly formed distribution company with exclusive distribution rights in the Americas to the Onkyo, Pioneer, Pioneer Elite, and Integra brands, as well as rights with respect to the Magnat and Heco brands.
Paul Jacobs remains President and CEO of the Premium Audio Company, LLC subsidiary. Mr. Jacobs added, “Klipsch remains our flagship brand within our premium audio portfolio and we are expecting significant growth this year with new products coming to market and our expanded distribution. We will also be bringing to the U.S. market some of our international brands, while offering our customers and consumers a much wider assortment of high-end premium audio products. We look forward to the coming year and building our business through innovation.”
About Premium Audio Company
Established in 2020, Premium Audio Company comprises two subsidiaries and includes some of the most legendary and revered brands such as Klipsch, Jamo, Mirage, ProMedia, Magnat, Heco, Mac Audio, Onkyo, Pioneer, Pioneer Elite, and Integra. Premium Audio Company, LLC is a wholly owned subsidiary of VOXX International Corporation.
About Klipsch Audio
In 1946 Paul W. Klipsch, inventor, acoustics pioneer and maverick, founded Klipsch Audio with the sole purpose of bringing the power, detail and emotion of the live music experience into his living room. Through the use of highly efficient speaker designs, handcrafted cabinetry and a thirst for real engineering breakthroughs – Klipsch, the great American loudspeaker company, was born in Hope, AR. Today, our diverse range of quality audio products includes speakers and headphones for almost any consumer and professional application – including cinema, whole-house, wireless, home theater and portable offerings. Honoring our founder’s legacy, Klipsch continues to be the legendary high-performance brand of choice for audiophiles and aficionados around the world. We are the Keepers of the Sound®. Klipsch® and Keepers of the Sound® are registered trademarks of Klipsch Group, Inc., registered in the U.S. and other countries.
About Onkyo Corporation
Since 1946 Onkyo has been passionately committed to developing audio products that deliver uncommon performance, quality and value. Bundling proprietary technologies and innovations with other sound – enhancing exclusives, Onkyo continues to create award winning products that are lauded by industry leading audio publications. The company’s philosophy is to deliver products and services that are superbly designed and built to a consistently outstanding standard of excellence.
About VOXX International Corporation
VOXX International Corporation (NASDAQ: VOXX) has grown into a leader in Automotive Electronics and Consumer Electronics, with emerging Biometrics technology to capitalize on the increased need for advanced security. Over the past several decades, with a portfolio of approximately 35 trusted brands, VOXX has built market-leading positions in in-vehicle entertainment, automotive security, reception products, a number of premium audio market segments, and more. VOXX is a global company, with an extensive distribution network that includes power retailers, mass merchandisers, 12-volt specialists and many of the world’s leading automotive manufacturers.