Steinway Musical Instruments to Be Acquired by Private Equity Firm (LVB)

Shares of Steinway Musical Instruments Inc. (NYSE: LVB) have surged today after the company agreed to be acquired by private equity firm Kohlberg & Company. Steinway Musical Instruments, which designs, manufactures, markets and distributes musical instruments, said that it will be acquired by an affiliate of Kohlberg & Company in a transaction valued at nearly $438 million. On completion of the transaction, LVB will become a privately held company. As per the terms of the agreement, an affiliate of Kohlberg & Company will initiate a tender offer to acquire all outstanding shares of LVB for $35 per share in an all cash transaction. The offer price from the private equity firm represents a premium of 33% over the average closing price of LVB’s common shares during the 90 trading days ended June 28, 2013. Michael Sweeney, Chairman and Interim CEO of Steinway Musical Instruments, said that the agreement with Kohlberg represents an exceptional valuation for the company’s shareholders, while also representing an important next step in the growth of the company. Sweeney noted that Kohlberg has long been one of America’s premier private investment firms, and the company is delighted that they recognize the bright future for LVB as well as the company’s great heritage. Christopher Anderson, a Partner at Kohlberg, said that Kohlberg’s long history of collaboration to grow and expand some of the world’s leading consumer brands makes it an ideal partner for Steinway to accelerate its global expansion. The agreement includes a 45-day “go-shop” period. During this period, LVB can solicit alternative offers to the Kohlberg transaction. LVB shares hit a 52-week high of $35.21 earlier today as investors digested news of the acquisition. At last check, the stock was trading 15.28% higher at $35.08 on above average volume of 672,255.