Steinway Musical Instruments has entered into an agreement to be acquired by Kohlberg & Company in a transaction valued at approximately $438 million. Upon the completion of the transaction, Steinway Musical Instruments will become a privately held company.
Under the terms of the agreement, Kohlberg will commence a tender offer to acquire all of the outstanding shares of the company’s common stock for $35 per share in cash. The agreement provides for a 45-day go-shop period during which time the company may solicit alternative proposals to the transaction with Kohlberg.
Steinway Musical Instruments, through its Steinway and Conn-Selmer divisions, is a designer, manufacturer, marketer and distributor of musical instruments. These products include Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones, Ludwig snare drums and Steinway & Sons pianos. Through its online music retailer, ArkivMusic, the company also produces and distributes classical music recordings. Steinway is based in Waltham, MA (www.steinwaymusical.com).
“For over 160 years, Steinway’s skilled manufacturing artisans have been crafting the world’s finest musical instruments to perform with unequalled touch and tone. We feel fortunate to be selected to partner with Steinway and further its commitment to serving its artists and customers worldwide by producing the finest pianos and musical instruments available,” said Kohlberg Partner Christopher Anderson. “Kohlberg’s long history of collaboration to grow and expand some of the world’s leading consumer brands makes us an ideal partner for Steinway to accelerate its global expansion, while ensuring the artisanal manufacturing processes that make the company’s products unique are preserved, celebrated and treasured.”
Kohlberg & Company invests in companies in the industrial manufacturing; consumer products; business services; healthcare services; and financial services sectors. The firm concentrates on transactions with EBITDAs between $20 million and $100 million where it can invest between $50 million and $200 million of equity. Kohlberg & Company is currently investing its seventh private equity fund, Kohlberg Investors VII. The firm was founded in 1987 and is based in Mt. Kisco, NY (www.kohlberg.com).
“Our agreement with Kohlberg represents an exceptional valuation for our shareholders, while also representing an important next step in the growth of Steinway,” said Michael Sweeney, Chairman and interim CEO of the company. “Kohlberg has long been one of America’s premier private investment firms. We are delighted that they recognize the bright future for Steinway as well as value our great heritage. We look forward to this partnership as we continue our mission of making the world’s finest musical instruments without compromise.”
Allen & Company is serving as financial advisor to Steinway in this transaction.
© 2013 PEPD • Private Equity’s Leading News Magazine • 7-2-13