Fender Projects Post-IPO Value of $395 Million
The iconic Fender logo may need to be upgraded to include a few dollar signs thanks to a healthy IPO -- Initial Public (Stock) Offering -- that looks to raise as much as $160.5 million, putting the venerable guitar maker's value in the neighborhood of $395 million.
According to Reuters, the company expects to sell just under 11 million shares at a projected value between $13 and $15 -- pretty cheap when compared with one of the guitars used by Jimi Hendrix or Eric Clapton, but still adding up to a nice payday for Fender.
The public offering, which was announced in March, marks the latest chapter in the growth of the company that pioneered the mass manufacture of solid-body electric guitars. Founded in 1946 by Clarence "Leo" Fender, the company has been responsible for some of rock's most widely used instruments, including the Telecaster and Stratocaster electric guitars, as well as the Precision bass.
Fender sold the brand to CBS in 1965 for $13 million (which might seem like a paltry sum, but was actually $2 million more than the company had recently paid for the New York Yankees), and while the new corporate ownership was initially regarded as a good thing, cost-cutting measures introduced by CBS were blamed for a loss of durability in the company's instruments, and by the early '80s, the Fender brand had lost some of its luster.
Things started turning around for Fender in the mid '80s, when employees bought the company back from CBS and renamed it the Fender Musical Instruments Corporation, beginning a new era in which older Fender models have co-existed with new designs and an expanded line of instruments that has grown to include a number of other brands, including Charvel, Olympia, and Ovation.