SCOTTSDALE, AZ — Iconic guitar maker Fender Musical Instruments Corp. has announced plans to go public with its shares, which it will list on NASDAQ under the proposed ticker FNDR.
FMIC registered on March 8 for $200 million initial public offering. According to the SEC filing, approximately $100 million of the net proceeds will be used to pay down debt, with the remainder going toward working capital and other general business. J.P. Morgan ad William Blair & Co. are the lead underwriters on the deal; private equity firm Weston Presidio, which purchased 43 percent of the company's stock in 2002, along with FMIC officers will continue to retain "substantial control" after the offering.
According to the company, FMIC was the top selling guitar manufacturer in the United States last year, with revenues of its electric, acoustic and bass guitars reaching approximately $700 million, up from $618 million a year earlier. Headquartered in Scottsdale, AZ, FMIC owns a number of brands, including Fender, Squier, Jackson, Guild, Ovation and Latin Percussion, and has licensing agreements with others such as Gretsch, EVH (Eddie Van Halen) and Takamine,. Among its well-known products are the Telecaster, Stratocaster, Precision Bass and Jazz Bass guitars. FMIC also offers a complete line of accessories for the music industry.
Leo Fender started the company, Fender Electric Instrument, in 1946. In streamlining the manufacturing process to mass produce the instruments, Fender developed a process whereby the neck is bolted to the body, rather than adhered by glue. From there, he went on to develop a host of new solid body design products, including the Telecaster in 1951 and the Stratocaster in 1954.
Fender sold the company to CBS in 1965. A group of investors, led by William Schultz and William Mendello, bought Fender in 1985 and opened a flagship factory in Corona, CA, which was followed by a second factory opening in Ensenada, Mexico.
Adding to its portfolio, in late 2007, FMIC acquired Kaman Music Corp., reportedly the largest independent U.S. distributor of musical instruments and accessories including: Ovation, Takamine and Hamer guitars, Latin Percussion, Gibraltar Hardware, Sabian cymbals, Toca Percussion and Genz Benz amplifiers.
In January 2012 FMIC introduced its Fender Select line of hand-crafted production guitars, which the company said in the SEC filing, “have the potential to produce a high margin revenue stream, as well as provide us with an opportunity to update and refresh our existing product lines. We believe that new product releases also create an aspirational desire for consumers to upgrade and purchase new products.”
FMIC’s products are distributed globally in more than 85 countries. Company CEO is Larry Thomas.
Below are pictures from Fender's factory:
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