Monday, July 1, 2013

Acquiring Steinway & Sons

In a $438M deal, Steinway Musical Instruments - the maker of Steinway & Sons pianos - has been acquired by the private equity firm Kohlberg & Company.

The NY Times reports:
The deal is the latest twist for the 160-year-old piano maker, whose instruments can be found in concert halls and living rooms around the world. In recent years, the company, which is based in Waltham, Mass., has had to adjust to a weak economy and changing cultural tastes.

In March, the company reached an agreement to sell Steinway Hall, the 88-year-old building across the street from Carnegie Hall in Manhattan where renowned pianists and amateurs alike have tried out pianos.

Kohlberg & Company, a firm co-founded by Jerome Kohlberg (who previously was one of the founders of Kohlberg Kravis Roberts & Company), emphasized that it would aim to preserve Steinway’s storied heritage.

In buying Steinway, the firm plans to “accelerate its global expansion, while ensuring the artisanal manufacturing processes that make the company’s products unique are preserved, celebrated and treasured,” Christopher W. Anderson, a Kohlberg & Company partner, said in a statement.

The company, founded in 1853 in a Manhattan loft by Henry Engelhard Steinway and his three sons, expanded rapidly to become the world’s largest piano manufacturer by 1860. It opened a factory in Hamburg, Germany, in 1880, and toasted its success in 1925 with the opening of Steinway Hall on West 57th Street in New York.
Incidentally, the picture at right is of the Steinway family mausoleum at Green-Wood Cemetery in Brooklyn. The mammoth structure has room for 245 members of the Steinway family - 122 on the first floor and 123 in the basement. It is the final resting place of Mr. Steinway and his Sons (and, their subsequent family members). Hopefully, Steinway Musical Instruments wont need to take up final residence there as so many Steinways have already.

I'm not saying it will ... but let's be honest ... you know, you just never know. I mean: when an organization as legendary as Steinway & Sons is overtaken acquired by a private equity firm, the sole purpose of which is to make a return on the initial investment - not epic musical instruments - I can only image the changes that will be afoot.

Stay tuned ...

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