Fa­bled gui­tar maker tunes up for IPO

The Washington Times Daily - - Business - BY BREE FOWLER

NEW YORK | An in­stru­men­tal piece of rock ‘n’ roll his­tory is go­ing public.

Fen­der Mu­si­cal In­stru­ments Corp., the maker of leg­endary gui­tars strummed by the likes of Buddy Holly, Jimi Hen­drix and Eric Clap­ton, filed pa­pers Thurs­day for a $200 mil­lion ini­tial public of­fer­ing.

Founded in 1946 by Leo Fen­der, the com­pany cre­ated the Tele­caster and Stra­to­caster gui­tars in the 1950s.

The “Strat,” a fa­vorite of Hen­drix and scores of oth­ers, went on sale in 1954. It had a sturdy, all-wood body that could stand up to re­peated abuse, mak­ing it pop­u­lar in the rock ‘n’ roll world.

“The Fen­der brand in par­tic­u­lar is closely as­so­ci­ated with the birth of rock ‘n’ roll and has a strong legacy in mu­sic and in pop­u­lar cul­ture,” the com­pany said in a fil­ing with the Se­cu­ri­ties and Ex­change Com­mis­sion.

In its fil­ing with the SEC, Fen­der called it­self the coun­try’s big­gest seller of elec­tric, acous­tic and bass gui­tars. It also makes am­pli­fiers and other in­stru­ments in­clud­ing ban­jos, ukule­les and man­dolins, and sells in­stru­ments un­der other brands such as Squier, Jack­son, Guild, Ova­tion and Latin Per­cus­sion.

The clas­sic Strat and Tele­caster mod­els are still made to­day, with prices rang­ing from a cou­ple hun­dred dol­lars for a ba­sic model to sev­eral thou­sand dol­lars for high-end and cus­tom ver­sions.

Fen­der went through sev­eral own­ers be­fore mak­ing its push to the public mar­kets. In 1965, founder Leo Fen­der sold the com­pany to broad­caster CBS Inc., which sold it to an in­vestor group 20 years later.

Pri­vate eq­uity firm We­ston Pre­sidio now owns 43 per­cent of Fen­der. Fen­der’s dis­trib­u­tor in Ja­pan, Ya­mano Mu­sic, holds the No. 2 stake with 14 per­cent of the com­pany.

Launch­ing the IPO will help Fen­der pay down its debt load of $246.2 mil­lion. Fen­der said it plans to use about $100 mil­lion of the IPO’S pro­ceeds to re­pay debt, with money left over for work­ing cap­i­tal.

With sales in 85 coun­tries, Fen­der said rev­enue could get a boost from grow­ing in­ter­est in gui­tar-based mu­sic from emerg­ing mar­kets such as China, In­dia and In­done­sia. But it warned that in­creas­ing pop­u­lar­ity of other types of mu­sic, such as rap or house, could hurt de­mand for its gui­tars.

The com­pany plans to trade the shares un­der the “FNDR” sym­bol on the Nas­daq, but didn’t say when. The final of­fer­ing may dif­fer from the $200 mil­lion in Thurs­day’s fil­ing as the IPO’S bankers gauge in­vestor de­mand for Fen­der shares.

Fen­der said it posted net in­come at­trib­ut­able to com­mon stock­hold­ers of $3.2 mil­lion in 2011, from a net loss of $17.3 mil­lion the year be­fore. Rev­enue grew 13 per­cent to $700.6 mil­lion from $617.8 mil­lion.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.