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Legendary guitar maker to rock Wall Street with IPO

posted 9 Mar 2012, 10:50 by Mpelembe   [ updated 9 Mar 2012, 10:51 ]

Famed-guitar maker Fender applies for $200 million public offering to pay down debts.

LONDON, ENGLAND, UK  (REUTERS) - Fender Musical Instruments Corp, whose guitars have been used by music legends Jimi Hendrix, Eric Clapton, Mark Knopfler, Jeff Beck and Pink Floyd's David Gilmour, filed with U.S. regulators on Thursday (March 7) to raise up to $200 million in an initial public offering.

Formed in the 1940s by Leo Fender, Fender was the first to mass-produce solid-body Spanish-style electric guitars, including the iconic Stratocaster.

It was sold to television network CBS in 1965. When CBS started selling off its non-media businesses, then Fender Chief Executive William Schultz teamed up with some of the company's international distributors and bought out Fender in 1984.

Schultz and his family trust still own about 6 percent of Scottsdale, Arizona-based Fender, according to the company's filing with the Securities and Exchange Commission.

Private equity firm Weston Presidio owns a 43 percent stake.

J.P. Morgan, Baird, Stifel Nicolaus Weisel and Wells Fargo Securities would be underwriting the offering, Fender said in the filing. The company plans to use about $100 million of the proceeds to pay off debt.

Since part of the debt repayment will be made to some of the banks underwriting the offering, Financial Industry Regulatory Authority (FINRA) regulations require the offering to have a qualified independent underwriter, the filing said.

William Blair & Company would act as the independent underwriter in the offering.

The number of shares to be offered -- a portion of which will be sold by some stockholders -- and the price range for the offering have not yet been determined, Fender said.

The company, which had net sales of $700.6 million in the fiscal year ended Jan. 31, said it plans to apply to list on the Nasdaq under the symbol "FNDR."

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.