VOXX International Corporation and Sharp Corporation have begun the process of acquiring assets from the Onkyo Home Entertainment Corporation. The acquisition will provide VOXX, its wholly-owned subsidiary, Premium Audio Company, and Sharp with ownership of the brands, intellectual property, engineering, and manufacturing rights of the Onkyo and Integra brands.
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 will now own. 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 joint venture.
“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,” says Pat Lavelle, president and CEO of VOXX International.” “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.”
Premium Audio Company will handle distribution worldwide and will be responsible for all sales and marketing activities, while Sharp will be responsible for manufacturing via its facility in Malaysia. Further, VOXX International has entered into a new licensing agreement with Pioneer Corporation, which will allow Premium Audio Company to market and sell the Pioneer and Pioneer Elite brands worldwide, excluding the Peoples Republic of China.
The finalization of the transaction is subject to customary and regulatory closing conditions and is expected to be consummated on or before August 30, 2021.