Sound United LLC, parent company to Denon, Polk Audio, Marantz, Definitive Technology, HEOS, Classé, and Boston Acoustics, has entered into a term sheet agreement to acquire Onkyo Corporation's consumer audio division, including the Onkyo, Pioneer, Pioneer Elite, and Integra brands.
The preliminary agreement will enable both companies to quickly proceed with negotiations of definitive terms and agreements. Kevin Duffy, current CEO for Sound United, will be CEO of the newly combined businesses.
The transaction, says Sound United, reflects a continued focus by the company to "meet consumer demand for the best-sounding and most technologically advanced audio products available. The expanded brand portfolio will allow Sound United to better serve consumers with premium products tailored to their specific needs."
"We are thrilled by the opportunity to add the venerable Onkyo and Pioneer brands to our portfolio,"says Duffy. "Sound United is one of the leading dedicated providers of premium audio/video products, and we believe the combined businesses will bring unrivaled innovation and sound performance to our consumers and channel partners. Upon completion of the transaction, we will work tirelessly with the consumer audio division of Onkyo Corporation to ensure a seamless transition into the Sound United family so that all employees, customers and channel partners benefit from the enhanced breadth and depth of the new organization."
Investing in additional brands enables Sound United to better innovate across product categories, feature sets, technology partners, and consumer targets, says the company in a prepared announcement. "As a leader in the fast-growing wireless, voice-enabled speaker and soundbar categories," further reads the announcement, "Sound United is eager to invest in the development of new products with the added benefit of Onkyo and Pioneer's extensive legacy of innovation. By pairing the world's best electrical and acoustical engineering talent, Sound United will have the capacity to continue a history of unparalleled product development. This expanded scope will also offer manufacturing efficiencies, expedited development cycles and a combined business better positioned to invest in the future of the premium audio category."
The Onkyo Corporation's consumer audio division includes product categories such as AV receivers, HiFi equipment, mini-systems, smart speakers, turntables, soundbars, home theatre systems, optical disc players, and others.
Onkyo Corporation will retain the rights to the Pioneer and Onkyo brands for the purposes of its Digital Life and Embedded Audio businesses. As part of the planned acquisition, Sound United will be acquiring all worldwide third-party distribution agreements under which the premium audio products are currently sold.
The completion of the transaction is subject to various normal-course conditions precedent, including, but not limited to, execution of the Definitive Agreement, the completion of satisfactory due diligence, committed financing, and approvals from regulators and the Onkyo Corporation's shareholders at the Annual General Meeting, expected to be held on or
about June 26, 2019.
Sound United is a DEI Holdings company and a portfolio company of Boston-based private equity firm Charlesbank Capital Partners, LLC.