Rock & roll legend Fender goes public
NEW YORK - The Associated Press
American singer and songwriter Bruce Springsteen performs at the 54th annual Grammy Awards on Feb 12 in Los Angeles with his Fender telecaster. AP photoFender Musical Instruments Corp., the maker of legendary guitars strummed by the likes of Jimi Hendrix and Eric Clapton, filed papers on March 8 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 and 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 said it is 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, 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 like 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.