Fender Musical Instruments Corp has filed for an initial public offering and hopes to raise up to 200 million dollars.
The historic guitar and amplifier maker is going public in hopes of raising enough money to fund their planned global expansion.
Being the first brand to mass produce solid-body Spanish style electric guitars, and represented by the iconic Stratocaster and Telecaster, it is no surprise that it is now ready to take the leap into more markets. Formed by Leo Fender in the 1940’s, Fender has gone through a lot of big changes including being sold to CBS television network in 1965 and bought back again as an independent company by William Schultz in 1984. The current biggest stake holder of Fender as of the time of this writing is a private equity firm called Weston Presidio which carries 43% stake.
Fender had a net sale of $700.6 million in the fiscal year, gaining a 13 percent increase from $617.8 million. Now Fender wants to trade on the Nasdaq under the symbol “FNDR”. It is expected that there will be a significant demand for its stock since the Fender brand continuous to be iconic and popular in many styles of music. J.P. Morgan, Baird, Stifel Nicolaus Weisel and Wells Fargo Securities would be underwriting the offering. Fender also plans to use about 100 million dollars of the proceeds to pay off their debt.
Fender knows that their brand in particular “is closely associated with the birth of rock ‘n roll and has a strong legacy in music and in popular culture”. It appears that they want to capitalize on their iconic status to boost their gains and to use the proceeds to increase their revenue by getting into markets like India, Indonesia and China.
Fender did not give out important information like how many shares do they intend to sell, or what the price target is for their stock. The final size of the IPO may differ from the $200 million as the IPO’s bankers calculate and anticipate investor demand for Fender shares.
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