""Guitar Center Inc. reported today its board had accepted a $1.9 billion cash buyout offer from a private equity firm.
The deal with affiliates of Boston-based Bain Capital Partners LLC came amid speculation within the industry and in financial circles that a buyout was imminent. Guitar Center had hired investment bank Goldman Sachs & Co. to auction the company. ...
Under the agreement, the buyers will also assume about $200 million in debt, putting the total transaction value at $2.1 billion. The deal, which requires approval by Guitar Center shareholders, is expected to close in the fourth quarter of 2007....
Guitar Center began in 1959 when former car salesman Wayne Mitchell purchased a small appliance and home organ store in Hollywood, Calif. In 1964, Mitchell converted a movie theater next door to his Hollywood shop, and opened the first Guitar Center on Sunset Boulevard. Subsequently, the company added stores along the California coast and expanded into the Chicago market and then nationally after it went public in 1997.
The company today has more than 210 Guitar Center-brand stores in U.S major, secondary, and tertiary markets. The stock has more than tripled since its initial share sale, and revenue last year was $2.03 billion, compared with $296.7 million in 1997. The company also operates about 95 Music & Arts Centers, as well as the musiciansfriend.com and Music123 direct-response retail entities. ..
Bain Capital (www.baincapital.com) is a global private investment firm that manages several pools of capital including private equity, high-yield assets, mezzanine capital, and public equity with about $50 billion in assets under management. Bain has made private equity investments and add-on acquisitions in over 240 companies around the world, including Toys "R" Us, Burger King, Warner Music Group, and Staples.
Formed in 1984, Bain Capital was for years headed by Mitt Romney, the former Massachusetts governor who is now among aspirants for the 2008 Republican presidential nomination.