Pioneer Corp. will receive a 77 billion yen (approximately $684 million) investment, as well as a cash offer to existing Pioneer shareholders of approximately 25 billion yen (approximately $222 million) to existing Pioneer shareholders, from global private equity firm Baring Private Equity Asia (BPEA), under what is called the Pioneer Revitalization Plan (“the Plan”). The Pioneer Revitalization Plan aims to bring stability to the business by securing vital working capital and management support from BPEA, and “removing uncertainty about the company’s ability to continue sustainable operations.”
BPEA and Pioneer are confident that the Pioneer Revitalization Plan offers the best option to take the company back to a sound operational footing and return to a growth path.
“I believe BPEA shares our vision for a return to growth, making it the best partner to implement the Pioneer Revitalization Plan. Mindful of my responsibilities as Pioneer’s leader, it was only after very careful consideration that I concluded that an alliance with BPEA is imperative to the success of the Pioneer Revitalization Plan. My mission is to help revitalize Pioneer as quickly as possible and return the company to a position where it can deliver products and services that delight all of our customers,” said Koichi Moriya, president and CEO of Pioneer.
This transaction is subject to shareholder approval at an extraordinary meeting of Pioneer shareholders scheduled for Jan. 25, 2019, and gaining regulatory approvals including international and domestic anti-trust clearances. The third-party share allotment is expected to complete on March 1, 2019, at the earliest, with BPEA set to take full ownership of Pioneer in March 2019.
“BPEA has spent a lot of time building ties with Pioneer and developing this plan, so we are delighted to be able to partner with Pioneer at a pivotal time in its history. We are a long-term investor, averaging five or more years, and have successfully partnered with a number of Japanese companies, since opening our Tokyo office in 2006. We are confident that the combination of our investment and management support offered under the Pioneer Revitalization Plan will enable Pioneer to fully realize the potential of its innovative technology, well-established brands and employees. Our goal is to ensure that Pioneer continues to offer products that embody the Pioneer brand and are loved by so many people around the world,” added Jean Eric Salata, Baring Private Equity Asia CEO and founding partner.
This transaction is subject to shareholder approval at an extraordinary meeting of Pioneer shareholders scheduled for Jan. 25, 2019, and gaining regulatory approvals including international and domestic anti-trust clearances. The third-party share allotment is expected to complete on March 1, 2019, at the earliest, with BPEA set to take full ownership of Pioneer in March 2019.
Nomura Securities Co., Ltd. is acting as financial advisor to Pioneer and Nagashima Ohno & Tsunematsu is acting as its legal counsel. Merrill Lynch Japan Securities Co. Ltd. is acting as financial advisor to BPEA and Mori Hamada & Matsumoto is acting as its legal counsel.