JULY 27 | GUITAR CENTER | FINANCE
GC to be Bought for Roughly $2.1 Billion
Guitar Center has signed a definitive agreement to be acquired by affiliates of Bain Capital Partners, a private investment firm. The total transaction value, including assumed debt, is approximately $2.1 billion.
This agreement represents the culmination of an auction process, led by Goldman, Sachs & Co., to solicit interest in a potential acquisition of GC. The company’s board of directors, acting on the recommendation of a special committee of independent directors, has approved the merger agreement and recommended that GC stockholders support the transaction. The transaction is expected to close in the fourth quarter of 2007 and is subject to customary closing conditions, including the approval of GC’s stockholders.
Under the terms of the agreement, stockholders will receive $63 in cash in exchange for each share of GC common stock they own. This represents a 26-percent premium over the closing price of GC’s shares on June 26.
“We believe this transaction delivers outstanding value for our stockholders and is a strong validation of the company’s accomplishments over the years, as well as our future growth prospects,” said Marty Albertson, chairman and CEO of GC. “Following a comprehensive review process, our board of directors concluded this transaction is in the best interests of our company and our stockholders, and it has the full support of the management team. Bain Capital has a successful track record and significant investment experience in the retail industry, and we look forward to partnering with them going forward. We are committed to maintaining our vendor relationships and ensuring our customers will continue to experience the same quality and selection of musical instrument products, as well as the high level of service and professional advice through our stores and our Web sites.”
“As the leading retailer of musical instruments in the U.S., GC enjoys great brand recognition among musicians nationwide, a loyal customer base and a track record of significant growth,” said Jordan Hitch, a managing director at Bain Capital. “We look forward to working with the company’s experienced and capable management team to continue to build the business.”