The Pioneer Corporation sale to Baring Private Equity Asia was approved by Pioneer shareholders today, rescuing the leading car audio & electronics maker.
Pioneer plans to delist from the Tokyo Stock Exchange in March, just over 57 years since it became a public company, reported the Nikkei Asian Review. Baring will spend a total of 102 billion yen ($904 million) to take the company private.
Pioneer President Koichi Moriya apologized for his management decisions at the shareholder meeting but still faced criticism from shareholders, said the report.
Pioneer Electronics USA had no comment on the sale except to point to its new shareholder announcement here.
The Nikkei Asian Review credited Pioneer with being one of the first consumer electronics companies to recognize the future potential of the automotive market as it shifts to autonomous driving. But it wrote that Pioneer “did not succeed in creating an ‘ecosystem’ of tightly integrated products and services such as Apple’s.”
Pioneer has been weighed down with high operating costs from numerous manufacturing plants and from new investments in software needed to innovate for the autonomous market. These investments require deep pockets. It can take four or five years to develop new products, and it may be years before a company sees a return on its investment.
The Asian Review wrote, “Here, too, Pioneer came up short, with a capital-to-asset ratio of around 30% or less in recent years. One competitor, Alps Alpine, which focuses on contract manufacturing, had a capital-to-asset ratio of 70.3% at the end of September 2018. Pioneer may struggle to regain its footing even after the capital injection from Baring.”
See the full Nikkei Asian Review story here.