Strategy in TECH...
In a new hit to the supply chain, top brands report that they have been forced to close down factories in Vietnam as the country struggles with a COVID resurgence of surprising resiliency. Notable brand names like Samsung, Nike, Adidas, Apple, Coca-Cola have all at one time or another over the last 90-days been forced to close some or all of their factories as employees came down with the illness.
LG Electronics Inc (LG) released preliminary results for their fiscal 2021 second quarter, and they were an eye-opener. In fact, even in the wake of their surprising decision to exit the smartphone business, the company says they booked an all-new record in the quarter.
Voxx International has announced that they have finalized their agreement to partner with Sharp Corporation to acquire the Home Entertainment Division of Onkyo – news that Strata-gee readers knew about last week. The news comes as a result of Onkyo shareholders voting last Friday to approve the sale of the company to Voxx’s subsidiary known as the Premium Audio Company. Not much was new here on the Onkyo front, as we already told you about the deal only covering the Onkyo and Integra brands. However, we did learn some more interesting details on the company’s attempts relative to the Pioneer and Pioneer Elite brands.
In a rather terse announcement to investors posted today, Onkyo Home Entertainment Company, Ltd. announced that, by a majority vote of company shareholders, the sale of the company’s Home Entertainment Division to Voxx International has been approved. This vote of approval was widely anticipated and represents the last formality in the transfer of the company over to Voxx. This is the first time since 1945 that Onkyo’s parent company is no longer involved in the home entertainment business.
Well after much coverage on the VOXX/Onkyo deal by Strata-gee, in which VOXX remained strangely silent, the company finally issued a press release today in which they acknowledged that they had signed an asset purchase agreement (APA) with Onkyo for $30.8 million. The deal remains subject to approval by Onkyo shareholders in a vote scheduled to take place on June 25, 2021.
This news was likely not a surprise to Strata-gee readers. But what was a surprise is that this purchase does NOT include the Pioneer and Pioneer Elite brands.
On Wednesday, at a specially convened meeting of the Board of Directors for Onkyo Home Entertainment Co. Ltd. (Onkyo), company directors formally voted to authorize the transfer of Onkyo’s home AV division to the partnership of VOXX, Intl. and Sharp Corporation, in a deal valued at $30.3 million. The transaction is pending shareholder approval. This development represents real progress on a deal that had appeared to be bogged down recently.
Sony Group announced yesterday that it will invest no less than ¥2 trillion ($18 billion) over the next three years to turbo-charge the company’s transition from a consumer electronics powerhouse to a global leader in gaming, media, and services. The only hardware they are looking to equally dominate is the sensor business – and a potential entry into the general chip-making business (more on this later).
I can’t say this news from Onkyo Home Entertainment comes as much of a surprise. And based on conversations I’ve had with many of you over the last week or so, my reference a couple of weeks back to the growing romance between Onkyo and Voxx was clearly a wink-nod signal that I saw this coming. Onkyo has signed a preliminary agreement to sell their largest, but not their only, remaining division – the home audio/video division – to a partnership consisting of Sharp Corp. and Voxx Intl. The deal includes the Onkyo, Integra, Pioneer, and Pioneer Elite brands.
But after the abject failure of three previous attempts to sell the troubled company, will this deal actually close? See my thoughts…
This week we learned that 11 Trading Company…part of Premium Audio Company…which itself is part of Voxx International (love those big corporate structures), has added the only remaining Onkyo brands – Teac & Esoteric – to their distribution line list. They did not include these brands in the original announcement of their agreement with Onkyo, but most people expected it to be added in time. With this new development we get a nice progression of the budding relationship between the companies – Voxx distributing Onkyo, Integra, Pioneer, Pioneer Elite, Teac & Esoteric – while Onkyo Corp. becomes the Klipsch distributor in Japan. Where could this be heading?
Last Thursday, Onkyo notified the Tokyo Stock Exchange that its latest forecast for fiscal 2021 results shows that – despite their best efforts – the company remains insolvent. It was a disappointing announcement, as it means that the company’s well thought-out plans to return to solvency failed. So what happens now?
