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Steinway Musical Instruments,
, a global leader in the design,
manufacture, marketing and distribution of high quality musical instruments,
today announced that it has entered into a definitive agreement to be
acquired by an affiliate of Kohlberg & Company ("Kohlberg"), a global
private equity investment firm, in a transaction valued at approximately
$438 million. Upon the completion of the transaction, the Company will
become a privately held company.
Under the terms of the agreement, an affiliate of Kohlberg will commence a
tender offer to acquire all of the outstanding shares of the Company's
common stock for $35.00 per share in cash, representing a premium of 33%
based on the average closing price of the Company's common shares during the
90 trading days ended June 28, 2013, and 45% based on the average closing
price during the 52-week period ended June 28, 2013. The board of directors
of the Company unanimously recommends that the Company's stockholders tender
their shares in the tender offer.
"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."
Kohlberg Partner Christopher Anderson commented, "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. 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."
The agreement provides for a 45-day "go-shop" period during which time the
Company may solicit alternative proposals to the transaction with Kohlberg
including by way of waiving any existing "standstill" agreements. Any
shares not tendered in the offer will be acquired in a second-step merger at
the same cash price as paid in the tender offer. Closing of the tender offer
is conditioned upon customary closing conditions, including the expiration
or termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act and receipt of German antitrust approvals. The
transaction is expected to close in the third quarter of 2013.
Allen & Company LLC is serving as financial advisor to the Company in this
transaction. Skadden, Arps, Slate, Meagher & Flom LLP and Gibson, Dunn &
Crutcher LLP are acting as legal advisors to the Company. Ropes & Gray LLP
is acting as Kohlberg's legal advisor.
About Steinway Musical Instruments, Inc.
Steinway Musical Instruments, Inc., through its Steinway and Conn-Selmer
divisions, is a global leader in the design, manufacture, marketing and
distribution of high quality 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. For more information
about Steinway Musical Instruments, Inc. please visit the Company's website
at www.steinwaymusical.com.
About Kohlberg & Company
Kohlberg & Company, L.L.C. ("Kohlberg") is a leading private equity firm
headquartered in Mount Kisco, New York. Since its inception in 1987,
Kohlberg has completed 60 platform investments and more than 100 add-on
acquisitions, with aggregate transaction value in excess of $9 billion.
Kohlberg has invested over $3 billion of equity capital over its history and
is currently investing its seventh private equity fund, Kohlberg Investors
VII. For more information, visit www.kohlberg.com.
Additional Information and Where to Find It
The tender offer for the outstanding common stock of the Company referred to
in this press release has not yet commenced. This press release is neither
an offer to purchase nor a solicitation of an offer to sell any securities.
The solicitation and the offer to buy shares of the Company's common stock
will be made pursuant to an offer to purchase and related materials that
Kohlberg intends to file with the Securities and Exchange Commission (the
"SEC"). At the time the tender offer is commenced, Kohlberg will file a
Tender Offer Statement on Schedule TO with the SEC, and thereafter the
Company will file a Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the tender offer. The Tender Offer Statement (including an
Offer to Purchase, a related Letter of Transmittal and other offer
documents) and the Solicitation/Recommendation Statement on Schedule 14D-9
will contain important information that should be read carefully and
considered before any decision is made with respect to the tender offer.
These materials will be sent free of charge to all stockholders of the
Company when available. In addition, all of these materials (and all other
materials filed by the Company with the SEC) will be available at no charge
from the SEC through its website at www.sec.gov.
Cautionary Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements with respect to the
tender offer and related transactions, including the benefits expected from
the acquisition and the expected timing of the completion of the
transaction. When used in this press release, the words "can," "will,"
"intends," "expects," "is expected," similar expressions and any other
statements that are not historical facts are intended to identify those
assertions as forward-looking statements. Such statements are based on a
number of assumptions that could ultimately prove inaccurate, and are
subject to a number of risk factors, including uncertainties regarding the
timing of the closing of the transaction, uncertainties as to the number of
stockholders of the Company who may tender their stock in the tender offer,
the possibility that a governmental entity may prohibit, delay or refuse to
grant approval for the consummation of the transaction, and general economic
and business conditions. The Company does not assume any obligation to
update any forward-looking statement, whether as a result of new
information, future events or otherwise. Factors that could cause actual
results of the tender offer to differ materially include the following: the
risk of failing to obtain any regulatory approvals or satisfy conditions to
the transaction, the risk that Kohlberg is unable to obtain adequate
financing, the risk that the transaction will not close or that closing will
be delayed, the risk that the Company's businesses will suffer due to
uncertainty related to the transaction, the competitive environment in our
industry and competitive responses to the transaction as well as risk
factors set forth above. Further information on factors that could affect
the Company's financial results is provided in documents filed by the
Company with the SEC, including the Company's recent filings on Form 10-Q
and Form 10-K.
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