Steinway Musical Instruments, the 160-year-old manufacturer of pianos, saxophones and trumpets, said it had agreed to be acquired by private equity firm Kohlberg & Co. in a deal valued at about US$438 million (HK$3.4 billion).
The American company’s pianos have been used by legendary artists, including Cole Porter and Sergei Rachmaninoff, and by contemporary ones like Chinese concert pianist Lang Lang. Its brass and woodwind instruments include the venerable CG Conn and Selmer brands.
The announcement came six months after Steinway, an American icon synonymous with handmade grand pianos, said it had decided not to sell itself following a 17-month-long exploration of strategic alternatives, including speaking to private equity.
“Our agreement with Kohlberg represents an exceptional valuation for our shareholders, while also representing an important next step in the growth of Steinway,” Steinway’s interim chief executive Michael Sweeney said in a statement.
Kohlberg offered US$35 per Steinway share in cash, a 15 per cent premium to Steinway’s Friday trading close of US$30.43 and a 33 per cent premium based on the average closing price during the last 90 trading days, the company said.
Steinway shares were trading at US$35.16 in early Morning trading in New York, indicating investors believed a higher offer was possible. Steinway said it had agreed to a 45-day “go-shop” period with Kohlberg that would allow it to solicit offers from other potential buyers.
Steinway has struggled to keep its production margins competitive amid stagnant sales. Still, its first-quarter earnings in May showed cost-cutting was paying off, with income before income taxes jumping to US$4.3 million from US$959,000 a year ago.
