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Private equity-backed Fender plans $200m IPO

9 Mar 2012

Fender Musical Instruments’ plan to hold a $200m IPO could be music to the ears of its largest backer Weston Presidio Capital.

The private equity firm holds a 43 per cent share of the largest seller of guitars in the US, which had made the regulatory filing with the Securities and Exchange Commission yesterday.

Fender increased its sales by 13 per cent, to $700.6m, last year and plans to expand into emerging markets such as China and India.

Reports suggest that although the company’s preliminary prospectus indicates some private sellers may sell in the IPO, but it is not clear whether Weston Presidio will be among them.

The company, whose guitars are played by music legends including Eric Clapton and Pete Townshend, has become the main seller of electric, acoustic and bass guitars since being founded by Leo Fender in 1946.

Nearly 16 per cent of Fender’s net sales are made through Guitar Center, another Weston Presidio-held company.

The company, which had a net income of $19m last year compared to a net $1.69m loss in 2010, plans to use £100m from the offering to repay a portion of a senior credit facility.

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