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Topic: Industry News: Guitar Center sells for for $1.9 Billion

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  1. #1
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    Industry News: Guitar Center sells for for $1.9 Billion

    ""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.

  2. #2

    Re: Industry News: Guitar Center sells for for $1.9 Billion

    hm, according to this report, it's $2.1 billion. maybe Bain didn't get the "good customer discount".

  3. #3
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    Re: Industry News: Guitar Center sells for for $1.9 Billion

    "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...."

  4. #4

    Re: Industry News: Guitar Center sells for for $1.9 Billion

    Quote Originally Posted by Garritan
    "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...."
    I'm a bit behind the curve here a bit...help me out!

    Did the Guitar Center buyout of Woodwind & Brasswind go through? I think it did, but I got away from the story a bit.
    There has been some change at woodwind & Brasswind, but not sure exactly how much. The ex-tuba specialist there is a friend since high school; he now operates a tuba distributorship in northern Indiana.
    Jim Williams
    Professor of Capitalism
    N9EJR
    Indianapolis Brass Choir
    All Your Bass Sus&Short Are Belong to Us.

  5. #5
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    Re: Industry News: Guitar Center sells for for $1.9 Billion

    Jim,

    Yes, Guitar Center recently acquired band and orchestral products mail-order retailer Woodwind & Brasswind for about $30 million which had reputedly went into bankruptcy.

  6. #6

    Re: Industry News: Guitar Center sells for for $1.9 Billion

    I had no idea it was worth so much. Amazing.
    "Music is a manifestation of the human spirit similar to a language. If we do not want such things to remain dead treasures, we must do our utmost to make the greatest number of people understand their secrets" -- Zoltan Kodaly

  7. #7

    Re: Industry News: Guitar Center sells for for $1.9 Billion

    I have 2 Sam Ash Stores and 1 Guitar Center nearby, I have been fairly happy with guitar center's attention to detail and the one here in Orlando Florida has pretty good customer service. I like it a little more then Sam Ash. However, if I am going to do any serious shopping, I go to sweetwater or something like that, dealing with the same sales person all the time is a nice benifit when you get one you really like.

    So what does this mean to Guitar Center, anything?
    www.energiestudios.com

  8. #8

    Re: Industry News: Guitar Center sells for for $1.9 Billion

    Oh yeah,

    the internetshops are killing the real shops here in germany... .

    I live in a bigger city, but now we have only one musicstore, and this is not a best... . When I want to inform me, I just have to turn to cologne to the "musicstore" there. But, also there I can`t get all answers to my questions.

    So now, I inform me most at the internet.... .
    "Music is the shorthand of emotion." Leo Tolstoy

    Listen to me, tuning my triangle http://www.box.net/shared/ae822u6r3i

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