Management Buyout Of Roland Planned By Current CEO + Taiyo Pacific Partners

roland-logoTaiyo Pacific Partners LP (“Taiyo”) has joined Roland CEO Junichi Miki to conduct a management buyout (“MBO”) of Roland for ¥42.6 billion Yen (about $420 million US dollars).

Here’s what Taiyo has to say about the planned buyout:

As a friendly, long-term shareholder, Taiyo has sought to provide management with analysis and support in their efforts to increase corporate value. However, the current business environment led Roland CEO Junichi Miki to reach out to Taiyo to discuss the idea of conducting an MBO. He was concerned that he needed to be able to quickly and effectively achieve some fundamental changes necessary at Roland.

We agreed with his assessment and are honored to join him in his desire to rebuild this great brand. Taiyo believes that this MBO offers current shareholders an opportunity to sell their shares at a premium and avoid the volatility risk associated with the transformation efforts. Today, Roland’s Board of Directors passed a resolution to endorse the tender offer and recommend that shareholders tender their holdings.

Brian K. Heywood, Chief Executive Officer and Managing Partner of Taiyo Pacific Partners, commented, “This transaction will enable Roland and current management to build a foundation for long-term strategic growth. I believe that President Miki is a strong leader that can make strategic and difficult decisions. We will be fully supporting his efforts. Roland has a dedicated team of management and employees, and an innovative DNA instilled from its founding. We hope to see Roland enhance its status as a global leader in digital musical instruments, and truly become a world-class company.”

Overview of the Roland MBO

  • Target company: Roland Corporation
  • Offerer: Tokowaka Corporation?Taiyo Jupiter Holdings, L.P. 100% ownership?
  • Offer price: ¥1,875
  • Offer period: Thursday, May 15, 2014 through Wednesday, June 25, 2014 (30 business days)
  • Shares targeted: No upper limit. Lower limit: 14,798,500 shares (66.67% of shares outstanding.)

62 thoughts on “Management Buyout Of Roland Planned By Current CEO + Taiyo Pacific Partners

  1. don’t think anyone is interested unless it means analog is on the way.. I believed too much of the marketing hype around the System 1 but and was so, so terribly disappointed when I heard it

    1. Do we really need more nostalgia synths?

      No! Let’s see them broaden the excellent Aira lineup, and do a modern analog that actually offers something new.

      1. Roland. Will. Not. Make. An. Analog. Synth.

        Say it again, loud, to yourself and everyone you know.

        Because this is the truth. Roland have spoken out various times stating their future lies with digital hardware. Unless Taiyo have enough influence to change that – or if they even desire to – this will not change.

        P.S. I don’t care either way. I’m not particularly interested in the AIRA range but I am glad to see Roland bother to make hardware other than keyboards: hardware instruments catering to the creation of electronic music.

        1. ..,and 512k RAM was all computers would ever need. Don’t say never, don’t find out your were wrong… relax an watch the world unfold….

      2. Did I say “nostalgia synths”? How about a synth that actually sounds good? Goodness knows it’s been awhile from those clowns

        Analog is simply the easiest way to do that. Once they can make a digital synth that sounds as good as analog everyone will be satisfied. System 1 sounds bloody awful

    2. I’ve got a better idea. Those who are yelling so loud about Roland producing an exact reissue of the Jupiter 8 need to band together and ask Roland how many PREPAID orders they would need for Roland to reissue the Jupiter 8 and how much it would cost per PREPAID order. If that is what you really want, that would be the way to approach Roland. Everyone wants a Jupiter 8, but how many really would spend the money on a new one.. Get a list of all those who will pay in advance and if your list meets the number needed for Roland to reissue, I am sure they would be glad to order it back into production.

      1. I see people say this type of thing in a lot of situations for products (not just synths) that they want, but 99% of the time this really isn’t how business works. This applies more to boutique products made by individuals or very small companies.

        1. Yes it worked with Moog and the Taurus 3 Bass pedals. We were asked to put out money down for it before they went into production to see if we would literally put our money where our mouths were and as a result got a new bass pedal that was analog, sounded very close to the original and had midi and patch saving facilities.
          Worth every cent for those those that could afford one.

          Roland “Design that future” -I and get that -but why not have a retro division that say brings out say a 303?
          Seems weird that there are replicas like the Bass Bot 303 making money from Rolands designs when they could be capitaiising on their own…
          I get that it would be frightfully expensive to make a Jupiter 8 in this day and age but a 303?

  2. The solution to their financial problems are so obvious. It’s NOT 1996 anymore!!!!
    No one is interested in workstation/Phantom style keyboards anymore. You can get a laptop for the same price and it’s a thousand times more powerful. For $200 you can get better sounds out of Logic Pro X.
    Soft synths or true analog hardware is what the market wants. Why are they resisting this so much? Why buy digital hardware when software can do it so much better?

    1. If it were obvious, they’d have done it already.

      The problem is that people have less money to spend on music gear these days, so companies line Roland are probably going to have to make some hard decisions and get smaller.

      1. People in most parts of the world have more money than they have ever had before. Roland will increasingly address the things t,here emerging markets want, mostly cheesy romplers and electric accordions probably.

    2. Even Hardware Analog will one day or the other disappear (I know, I will get a lot of down vote for this comment here), but from a pure R&D and future point of view, this is a no brainer software will take over for the mass market (mainly with the affordable and reliable “computer” such the smartphone and tablets).

      The Pure Analog Market will become a real niche market, just like Vintage Collection cars for car enthusiasts (even if we know the main core market for transportation in the future will be based on electric or other non-fossil energies). And I’m saying that as a nice gas engine lover and as a synth lover.

      Korg actually did the great choice by investing in the iPad market with all iApp… and by having some Analog for the niche market. They try to keep the Digital market by having their own version of the Computerized keyboard (with the Kronos), but I don’t think it’s gonna last when we see how much the software did take over on the Digital market.

      They can still save the company by targeting the very mass market such Casio, and by using the technologies they already developed by the past (just like they’re starting to do with the FA, the previous BK-5 and other entry price keyboards, mainly for the Chinese market).

      But it’s still not gonna make Synth Enthusiasts quite happy…

      1. I think you are correct sir, right now there is a gluttony of new analog gear.
        The analog movement will fade out in time, maybe not entirely but there is so much analog gear now on the market, some good, some not so good….still expensive. The only analog synths that are somewhat affordable are monophonic and para-phonic systems.

        I definitely agree about computers, hard to get inspired to create music on the very thing one does work on all day. It is nice to get away from the computer or iPad…….give me 3 dimensional hardware instruments any day.

      2. The reason companies like Native Instruments and Arturia got into the hardware business has a lot to do with software piracy. You can’t grab a copy of a Microbrute from a torrent site. That being said, I really hope Roland gets back into making analog machines again.

        1. That’s true, but we have to make a difference between the “hardware sound generator” (or Synth, which means the sound is generated by hardware component such pure analog synth), and the “hardware controller for software sound generated” (or Controller, where the hardware is pretty much just a big dongle controller to give you hands on a software that does generate the sound).

          Arturia did choose to enter in the hardware synth, while NI did choose to enter so far in the hardware controller.

          Both solution can help to reduce the piracy. There’s no question about the hardware synth choice, nobody can “download” a minibrute for instance. For NI’s choice, it’s more subtile, because it doesn’t really avoid anyone to crack Maschine… but the hardware could make the software irrelevant without the associated hardware. Anyone could try to use a crack version of the software, but they won’t have the same and proper user experience that can only be done when you own the hardware. And the company is doing money on the hardware, and pretty much don’t care about the software.

          It’s just like Apple that charge you extra for the MacBooks, iPads, etc… and can provide Apple product owners free OS such iOS, OSX, and free applications iTunes, iPhoto, Pages, Numbers, etc… I wouldn’t be surprised they would also give Logic Pro X or Final Cut Pro for free in the future… Because they won’t try to make money on the software, but on the hardware, because you’ll need a mac or an iPad/iPhone to be able to use those “free” software. And in this case, software does provide an additional value to the hardware. For instance Maschine is deliver with Massive, Drum Synth, and all kind of sounds… which could make it more interesting than the MPC Renaissance that doesn’t have a sound bundle as good and complete.

          Personally, I do believe the “Hardware Synth” will be a niche market in future and a lot of manufacture will switch to the “Hardware Controller” solution because we’ll find computer on pretty much anything (phone, car, watch, glasses, etc…). So the distinction with “3D Hardware Instrument” won’t be as obvious as today (The next MPC Renaissance with onboard Windows 8 might be an exemple… how it will be done, that’s another story ;)).

          However, a niche market doesn’t mean it won’t have great products and won’t be dynamic and profitable for the companies on this segment. It will probably just be in the 10 of thousands units range… while the iPad software alike, will be in the millions units range.

          Regarding Roland, I wouldn’t hold my hope too high… It’s been already 3 or 4 years, a friend of mine (with Roland insides) told me Roland wanted to be focus on the Chinese market with lower, cheaper products using existing technology… So far, he was right.

          My 2¢

  3. Great news! Scrap AIRA, scrap FA, scrap Jupiter. Build the analog synth and drum machine of old updated with modern MIDI, memory and digital effects processing and arpeggiation trickery.

    1. No No, I love the Jupiter 80, no one likes to hear this but the Jupiter 80 is a great synth and has such great sound capabilities.
      Would it be nice if Roland were more committed to the instruments they create? YES
      It would be nice if they came out with an Analog line of synths and drum machines once again! Hell yes to that!
      That doesn’t mean they have to go Analog only.

        1. It’s futile to compare them. My Fantom G6 with YASE and Integra 7 & V-Synth XT & Arturia collection V3 (Mac mini) do the job. Kronos User Interface & Sequencer are old and outdated. But the Kronos has many good engines like AL-1 and MOD-7. The Kronos just isn’t a workstation.

    2. Give me Korg Z1, Waldorf Microwave XT, Kawai K5000s or Yamaha VL-1 over “the analog synths of old” any day. Seriously, expanding on road ideas is where innovation lies, not in 20 more analog monosynths or $3000 analog polysynths.

  4. I don’t own any Roland gear at the moment (would welcome Integra-7 though, loved my Alpha Juno years ago), but in my eyes Roland is recently introducing some interesting gear, in comparison with e.g. Yamaha. So, wishing the best.

  5. I want Roland to stay in digital hardware realm. They are VERY good at it and can offer pretty good products at great price, like FA-06, Integra and system-1 demonstrate.

    There is so much variety in all other markets, that I don’t understand the demands to kill the last hope of digi HW synths and workstations. I hate Windowses unreliability and growing boot times(just wait a year) so much, that <$1500 laptop is not an option for me. If you dedicate a laptop for music, it's not so affordable when you think about it. Also, music making with an office interface is not for me. I could pay $1000 for a Fantoms interface ALONE!!!

  6. Roland has the best lineup of keyboards of the big three right now.

    But people are broke, because their real pay has been declining steadily since Reagan was in office and put the trickle down economics idea into play. I’d be surprised if Korg and Yamaha don’t end up reorging too.

    1. The USA isn’t the world! Many parts of the world are booming, this is where Roland’s future lies, and where their future product strategy will be determined.

  7. Seems like there is a lot of polarized views here about what Roland should manufacture. But why make it about analog vs digital? Roland will need to make decisions that are viable sustainable and generate profit. Every manufacturer needs a cash cow to bring in the revenue to invest in that next big thing. I remember these same conversations when the first digital synths came out and these were some of the biggest selling synths of all time. Korg M1 Yamaha DX7 Roland JX series etc. I think the new Roland gear tried to tie in old and new and to a point appease the analog fanboys but essentially it is appealing to a newer market of music makers while riding on the back of a famous line of synths. As an old fart I love analog gear but the next generation is where a major manufacturer needs to focus it efforts if they are to be there in the next twenty years.

  8. I have been a long term fan and user of Roland products and I liked their recent direction. Since Axon folded, Roland has also been carrying the flag for guitar synthesis. I wonder where this will lead.

  9. A $420 million valuation seems high concerning the immediate and intermediate profit potential. The musical instrument industry doesn’t seem too healthy right now, and the pro keyboard segment seems particularly iffy. You have the few people who have money and don’t really NEED anything buying analog synths to play with, and everybody else is either buying somebody else’s used synth, midi controllers or low-priced but capable boards such as the Casio Px-5S.

  10. This is a great day for real analog, it won’t be long long now, Roland will finally be a leader once again and offer what creative musicians want… An analog synth!

  11. Some of you seem to be under the impression that the company will save itself just by making an analog synth. I hate to break this to you guys/girls but i’d put money on the market for their workstations and the AIRA being far far bigger than for that of a pure synth. Why AIRA? It’s cheap, sounds good enough, and flashes brightly when the next bedroom producer walks into the music store to spend their pocket money on it. He takes it home, plugs it in and it just works – no farting around with tuning, patch cables, figuring out what type of CV etc. Why workstations? I’ve never been to a music teacher’s house or a school and seen an analog synth. Roland keyboard? Sure. And then theres the musicians who play in their pub on a Friday night – think they’re carting around an analog synth? Nope – it’s some kind of workstation.

    Honestly – you all talk as if Roland has nobody working for them who can look at a spreadsheet and say “Well, we’re still selling well on workstations – about time to release the FA-06” or “The market for this is finished, time for something new”

    Seriously – *we’re* the niche. Most people do not want what we want.

  12. So Roland needs to be “rebuilt” eh? Not surprising, it’s been run into the ground by pig-headed management that refuse to acknowledge the analog resuegence. Sack the bosses , rebuild the Analog JUPITER 8 and get back in the game Roland

  13. Roland should not have sold off Cakewalk/Sonar. They should have made that their core focus, and built keyboards that can play softsynths live, and keep developing new softsynths as software instruments. Develop a series of IOS apps that mimic Roland synths. See how KORG hit it out of the park with Gadget? That’s what Roland should have done. Several times I’ve suggested they make a D2 app, which they could skin with Roland sounds and different beatz. They’ve already virtualized the D-50, 303, 808, 909, Juno 6, I forget what else. They just tried to keep it locked into expensive Roland hardware instead of making them apps. Korg’s VST’s rock. Why is Roland so donkey-headed?

    1. You can not make a living from selling APPs because of the low prices. Only individuals who land a hit can make millions with APPs. There is no market for selling millions of synth APPs.

  14. I eagerly look forward to their next mega-workstation release. I’m sure the grand piano patch will require *megabytes* of memory, and sound stunning…

    Sigh.

  15. It’s funny to see you all argue over the one thing Roland needs to do to save itself. The truth is it needs to do all of these things. And being a very big company Roland is one of the few who actually can and do it well if they focus. They need to make a very inexpensive analog synth. And they also need to make a more expensive analog synth. But they also crucially need to continue making mid to low priced workstations for the masses out there who actually use them. And they need to make some new innovative synthesizers that are not based on analog. And they seriously need to get involved in the portable app market. And they desperately need to start making desktop software that integrates with all of their hardware. And they need to do all of this at a fairly high quality level while maintaining a low price for today’s economic truth.

    But think of all the other great places they could go! Like what if Roland was the first company to finally really nail an excellent affordable midi controller with aftertouch and all those things we want. What if they set the standard that every single piece of hardware you buy could also integrate digitally with a DAW without a lot of fuss? There are so many amazing things Roland could do. But the company that wants to stay diverse and healthy needs to do all of them today. There is no one killer market anymore. Companies today need to meet people where they’re at on the devices they are using at a price they can afford. That’s all there is to it.

    1. They did have that. It was Cakewalk Sonar Producer and the A800Pro Midi controller. I have them both. They are both excellent. The learning curve on a lot of this stuff is pretty steep though and IMHO, people do not want to spend the time to learn it.

    2. I agree except they don’t really need to do anything analog at all. While it’d be nice to see an analog Jupiter 8 it’s never going to happen. Also, digital tech doesn’t need to be reserved for only analog emulation and workstation. All of my favorite synths are digital because their scope is far beyond 98% of analog synths.

  16. The V-Synth was one of the greater sound-design tools ever built. It’s such a shame it has been neglected. True- it’s another “highly specialized-small-market” item, but they could make more $$ by making stupid simple beat boxes and quasi-dj-wannabe hardware. That would keep them at least floating. Then they could focus on the cool innovative stuff and pay the bills.

  17. From a revenue generating point of view – midi controllers that are physical clones of soft synths – I would love to see exact physical replicas of logics es2 in midi hardware format! Probably not something Roland would do but apple should totally acquire a failing midi controller manufacturer and do an es2 and ultra beat midi controller!

  18. There’s really no mystery here – if you want to know what Roland is doing, they put their annual report out two months ago, so this is probably a follow-on from that. It’s a fun read, go take a look at it. In short, they lost some money in 2012, but did pretty good in 2013. Synths did fine, they clearly see a lot of interest in the AIRA stuff and want to see how it does. (quote: “Also, as initiatives in new fields, new products were introduced into the dance market and made a good start.”) Software and guitar products did not do so well. Industrial printers and dental equipment did AWESOME but I doubt that will affect their music strategy much, though it might gives some hints as to where their supersaw technology came from 😉

    1. Hey, what are you doing in here with your actual research and informed opinions! This is where people without any real experience come to speculate on what giant corporations should be doing!

  19. I find it funny that people still idealize a Roland Corp that is more urban mythos than fact.
    The realty is they have done some stellar digital and stellar analog synths over the years and many of the bits people live where total flops at the time and the top end gear (think Jupiter 6 etc) are unobtainable price wise.
    Personally I am of the opinion that the SP808, VP9000, D50, V-Synth, JD800, JD990, JV1080/2080 (and later XV incarnations), Integra -7 the Jupiter 80, MV8800, R8 Drum machine and S750 samplers where all incredibly fine pieces of digital studio tech.
    I’d love to see them develop physical modelling engines, hybrid granular machines and other funky new tech and leave the analog market up to those boutique manufacturers that do it well. A poly analog just isn’t feasible at the price point people want even with todays technology truth be told and I for one have been around the block long enough to know that different types of technology have their use and implementation in the studio.
    At the end of the day they’re a business and cutting edge synth tech doesn’t get adopted easily by the masses either think hardware additive (K5000S), and Hartmann, Kyma, Pacarina, Waldorf Wave, and so on and so forth. A lot of the newer analogs on the market are just sub par build wise to keep costs down and rarely more than 4 voice poly at best.
    I rather see hybrid analog digital systems explored but one can do that now within a hardware modular framework quite comfortably and slowly save an build a custom rig that suits their own needs best.
    How this plays out for the future of Roland is anyones guess but I hope it isn’t the beginning of the end as much as I wish this whole fetishist approach to analog would die off and people would see different tools for what they are but I digress.

  20. “We hope to see Roland enhance its status as a global leader in digital musical instruments, and truly become a world-class company.”

    Dissapoint.

    But as someone else said here in the comments, we are the niche market. For the most part only people with a musical ear can really hear the difference in analog gear compared to digital emulations. For someone that does not what to hear for, the difference is usually obvious. Especially in high resonance sweeps of the filter or in any sort of overdrive or distortion. These are things that digital emulations just don’t do well yet. I would guess that day is quite some time off. The math it would take to compute all of the non-linear behavior of analog circuits is quite complex. Even something like U-he’s Diva synth, which is very good at what it does, isn’t perfect. Those P-Spice emulations it’s based on cannot be run in real time with current world hardware. Same with Rolands ACB technology. I’ve heard just enough of the Aira line to say, from my own ear that things don’t sound exactly analog. Something about high frequency peaks in the accents of the TB-3 strikes me as digital sounding.

    However, your average buyer is not going to notice that. Or care, especially when they can walk into guitar center and see something with flashing lights all over it at a price they can afford.

    Professionals and music fanatics are always going to want the best sound, especially if it’s a fair price. It’s really too bad that Roland continues to refuse to offer something analog for the serious musicians. It would at the very least, be very good for their PR. They are placing themselves in a dangerous position by only making products that appeal to budget conscious musicians and light hobbyists. You can’t type AIRA into google without seeing someone complain about it. Even if the reviews are generally good.

    I really wish they’d make something modern and analog, not just a recreation. But it’s not going to happen any time soon. At least we have plenty of other manufactures out there doing it. Besides, when was the last time Roland made a classic analog piece of hardware, the 80’s? Does anyone from back then still work there anymore?

  21. “We hope to see Roland enhance its status as a global leader in digital musical instruments, and truly become a world-class company.”

    Dissapoint.

    But as someone else said here in the comments, we are the niche market. For the most part only people with a musical ear can really hear the difference in analog gear compared to digital emulations. For someone that does not what to hear for, the difference is usually obvious. Especially in high resonance sweeps of the filter or in any sort of overdrive or distortion. These are things that digital emulations just don’t do well yet. I would guess that day is quite some time off. The math it would take to compute all of the non-linear behavior of analog circuits is quite complex. Even something like U-he’s Diva synth, which is very good at what it does, isn’t perfect. Those P-Spice emulations it’s based on cannot be run in real time with current world hardware. Same with Rolands ACB technology. I’ve heard just enough of the Aira line to say, from my own ear that things don’t sound exactly analog. Something about high frequency peaks in the accents of the TB-3 strikes me as digital sounding.

    However, your average buyer is not going to notice that. Or care, especially when they can walk into guitar center and see something with flashing lights all over it at a price they can afford.

    Professionals and music fanatics are always going to want the best sound, especially if it’s a fair price. It’s really too bad that Roland continues to refuse to offer something analog for the serious musicians. It would at the very least, be very good for their PR. They are placing themselves in a dangerous position by only making products that appeal to budget conscious musicians and light hobbyists. You can’t type AIRA into google without seeing someone complain about it. Even if the reviews are generally good.

    I really wish they’d make something modern and analog, not just a recreation. But it’s not going to happen any time soon. At least we have plenty of other manufactures out there doing it. Besides, when was the last time Roland made a classic analog piece of hardware, the 80?s? Does anyone from back then still work there anymore?

  22. Wow. I’m sure this will have important mplications, but I’m baffled as to what they might be.

    I know nothing about Taiyo Pacific Partners (except that they aren’t Bain Capital, and that is a Good Thing).

    I guess I just hope that Taiyo understands the market they’ll be playing in. What if they think that home console organs are The Future?

    MrP

  23. Do we REALLY need Roland to make another analog synthesizer? No..would it be cool? Hell yeah.
    I think a good majority of Synthtopia readers don’t resize that a majority of synth/keyboard buyers are not synth nuts…they are the folks needing a workstation for church…the studio guys who need a reliable digital ROMPler that can sound like a lot of things….it’s the wedding singer who needs a keyboard arranger, etc.
    The AIRA stuff is cool…it’s cheap and fun and it all sounds good…plus they are widely available. Do they sound exactly like the overused classic counterparts they emulate? Pretty much. Their vGuitar/Boss/vDrums are all pretty much standards right now and their workstations are of excellent value. Do a lot of us think some of their stuff is cheezy, sure! WE are a niche market….

  24. I think a mixture of digital and analog sounds the best and has the most variety. However, in general when it comes to subtractive synthesis, analog tends to sound better, at least the filters and any sort of overdrive that might be happening as the sound travels down the signal path. Digital should focus on what digital is best at. Things that analog can’t do. FM and PD synthesis, additive, granular. Ridiculous amounts of unison voices all getting tossed around a mod matrix and played polyphonically. Those things aren’t really possible in a analog environment.

    But still, why not analog also? It’s what a lot of consumers want to buy right now, and it’s great PR for a company to produce. Look at how well Korg and Arturia are doing right now. And both offer a wide range both analog and digital products. There’s no reason for any company to limit themselves. It just seems like Roland is missing out on a potential money maker here.

  25. why is the argument always “analog gear will be too expensive for Roland to make today”?? such rubbish….Korg are laughing all over you and your dumb logic

    come to think of it, Korg are laughing all over Roland. the more Roland keeps stating they wont make analog, the more Korgs shares go up.

    Korg staff: “haha Roland still doesnt GET IT…mmwwaahhh!!”

  26. All of the people who are saying I dont care if roland make any analog products, just admit you died a little inside like us all when you found out the aira line was digital….

  27. Nice post. I learn something new and challenging on websites I stumbleupon everyday.

    It’s always helpful to read articles from other writers and practice something from other sites.

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