Initial reports are coming out that Pioneer DJ is going to be sold off to to new buyers later this year. According to an article published on the Nikkei Asian Review, both Pioneer Corporation and KKR (an investment firm that owns the majority share of Pioneer DJ) are already in talks to sell off Pioneer DJ.
Pioneer DJ is likely to draw interest from companies outside Japan and large investment funds. The bidding process is slated to wrap up in the summer or fall.– via the Nikkei Asian Review
The initial estimate for a timeline is that bidding for the Pioneer DJ entity will be completed by late summer or fall 2019.
Pioneer Corporation is not Pioneer DJ
Let’s make one thing clear – Pioneer Corporation isn’t the same as Pioneer DJ. Many other publications reporting on this news initially incorrectly conflated the two. For instance, an article on Resident Advisor touted “Pioneer to leave the DJ business, reports say” – but that makes it sound like Pioneer DJ is no longer going to make DJ products. That’s incorrect.
These two companies split years ago, and no longer share offices, employees, owners, operations, product lines, etc. Pioneer Corporation took all of the non-DJ/pro audio facing brands, but has continued to struggle to turn profits. Pioneer Corporation does continue to hold a small (~15% or less) stake in Pioneer DJ. It seems likely that because Pioneer Corp has continued to struggle to post profits even under new ownership, selling off their stake in Pioneer DJ would be a good way to make some money.
Pioneer DJ, on the other hand, has had banner success as their own entity. They’re a market dominant force, outselling every other brand on sales reports for the DJ industry. If the Nikkei Asian Review report is correct (our contacts were not able to confirm that a sale is in process), then selling Pioneer DJ would be a sign of how successful the company currently is, not a sign of failure.
KKR is the majority shareholder of Pioneer DJ – they’re a massive investment firm, and the DJ technology business pales in comparison to many of their other investments in energy, real estate, infrastructure, tech, etc. Often when investment companies of their size purchase a small asset like Pioneer DJ, it’s to act as a profit-focused investor – opening up lots of short term capital to invest in rapid product development that will lead to long-term profits. I personally would call that mission a success – in the four years since KKR became the owner, Pioneer DJ has maintained and grown their market dominance.
Who Could Buy Pioneer DJ?
If a sale is imminent, what types of companies might you see expressing interest in Pioneer DJ?
Personally, I suspect the likely candidate is another large investment firm like KKR. Since 2015, Pioneer DJ has continued a very strong product push that has kept them at the forefront of the industry (for example, take industry and customer reactions to the DDJ-1000, which aligned the most modern-feeling DJ controller on the market with Pioneer DJ’s own software).
There’s also a possibility that a large tech giant could show interest if there were clear synergistic wins. The example I’ll use here is Apple’s purchase of Beats (which isn’t to say that Apple would ever consider buying Pioneer DJ, although they do have the cash). That deal was a win/win – Apple wanted to get more into the headphone business, gain a high-profit hardware line with high brand allegiance, and incorporate the growing streaming offerings into their own Apple Music product.
Could there be a similar acquisition-style purchase for Pioneer DJ? Share your thoughts in the comments.
Pioneer DJ Product Cycle Unfazed
Our contacts close to Pioneer DJ were able to confirm that it’s business as usual inside of the company – and that there’s no cause for alarm for DJs. Just look at the recent product announcements: a new hardware sequencer, SQUID; a new mid-level Rekordbox controller DDJ-800. These aren’t exactly the types of products you would expect to see a company release if they weren’t doing well.
We’ll continue updating this article with new information as we receive it. For now, don’t panic – instead, speculate in the comments with us.