Steinway sells for $499M
WALTHAM, Mass. — Famed piano manufacturer Steinway has been sold for about $499 million and will return to being a private company.
The company struck a deal with Paulson & Co., the investment firm founded by John Paulson, for $40 per share. That topped an earlier $35 per-share offer from Kohlberg & Co.
Steinway will discard its sales agreement with Kohlberg and pay a termination penalty of about $6.7 million.
Shares of Steinway Musical Instruments Inc. jumped nearly 6 percent in early trading.
Steinway has been in business for 160 years. Its pianos have been a status symbol and a must-have luxury in concert halls for more than a century, but the company suffered during the recession. Sales have increased in the past few years, but have yet to return to their pre-recession levels.
In June, the company finalized the sale of its flagship showroom in Manhattan, the legendary Steinway Hall, where Serge Rachmaninoff and Vladimir Horowitz, among other greats, once took grand pianos for a test ride.
Industry watchers believe that the recovering economy, coupled with increased overseas demand from places like China, made the company more attractive to private investors. Its shares rose 71 percent this year.
Steinway Chairman and CEO Michael Sweeney said Paulson's offer reflects the attractive value of Steinway's heritage and growth potential, while providing shareholders with much better returns.
Steinway & Sons was founded in 1853 by German immigrant Henry Engelhard Steinway.