Piano maker Steinway tunes up for $430m private equity buyout

City A.M. Reporter
STEINWAY Musical Instruments, the 160-year-old manufacturer of pianos, saxophones and trumpets, said yesterday it had agreed to be acquired by private equity firm Kohlberg & Co. in a deal valued at about $438m.

The Waltham, Massachusetts-based company’s pianos have been used by legendary artists, including Cole Porter and Sergei Rachmaninoff, and by contemporary ones like the so-called piano man Billy Joel. Its brass and woodwind instruments include the venerable CG Conn and Selmer brands.

The announcement came six months after Steinway, said it had decided not to sell itself after more than a year of exploring strategic alternatives, including speaking to private equity.

Kohlberg offered $35 per Steinway share in cash, a 15 per cent premium to Steinway’s Friday trading close of $30.43 and a 33 per cent premium based on the average closing price during the last 90 trading days, the firm said.

Steinway & Sons has an illustrious past encompassing over 160 years of musical history. The company was founded by German piano builder Henry Engelhard Steinway in Manhattan, New York about eight years before the start of the American civil war. Steinway recruited his five sons – Christian, Charles, Henry Jr, William and Albert – and over the next thirty years pushed on with a burst of creative and manufacturing nuance unmatched to this day. The company moved into the concert venue business in 1866, buying a 2,000-seat auditorium in New York and renaming it Steinway Hall. It also established plush new manufacturing facilities at the so-called Steinway Village. Following the death of Steinway Snr in 1871 – and garlanded with international design prizes for the sleek black instruments – son Christian pushed on with development of the business. He opened a new manufacturing plant in Hamburg – to this day the only place outside New York where the pianos are produced –and patented the iconic modern concert grand piano. The production bears little resemblance to some of the mass-produced pianos on the market – each grand piano is said to take one year of craftmenship to create, and a further two years to dry and season the wood. In the 20th century Steinway would go on to soundtrack a host of popular musical style, from pre-war jazz, to post-war rock and pop. Duke Ellington would tour the world leading his big band accompanied by his black upright Steinway, and ex-Beatle John Lennon captured the imagination by recording his 1971 hit anthem “Imagine’” on a white Steinway grand piano.