The parent company of an Elkhart musical-instrument maker is shifting from public to private ownership.
Steinway Musical Instruments Inc., the Massachusetts-based parent company of Elkhart’s Conn-Selmer Inc., announced Monday that it has agreed to be acquired by an affiliate of Kohlberg & Co., a private-equity firm based in Mount Kisco, N.Y.
The transaction, which is expected to close in the third quarter of this year, is valued at $438 million, according to Steinway’s announcement. At that point, the company will be privately held after 17 years of trading on the New York Stock Exchange under the ticker symbol LVB — short for Ludwig van Beethoven.
“This will allow us to focus less on Wall Street and even more on operations,” Steinway’s Chairman and interim CEO Michael Sweeney told The Boston Globe on Tuesday. “Now we can focus 100 percent on serving customers and expanding customer base.”
Steinway spokeswoman Julie Theriault said that, because the transaction isn’t final, company officials can’t say whether it will lead to any changes at Conn-Selmer in Elkhart. The agreement provides for a 45-day “go shop” period during which Steinway may solicit alternatives to the Kohlberg offer.
Kohlberg’s offer is to buy all of Steinway’s outstanding stock for $35 per share. That’s a 15 percent premium over the company’s closing stock price of $30.43 per share Friday.
Theriault said Steinway employs more than 1,700 people and operates 11 manufacturing facilities in the United States and Europe.
About 725 of those employees work for the Conn-Selmer division in Elkhart, where the company has two plants — one for brass instruments and one for woodwinds — as well as an office and distribution center.
Selmer Industries acquired Steinway Musical Products in 1995, and the new entity, Steinway Musical Instruments, made its initial public offering in 1996, according to the company’s website.
Steinway continued to grow through acquisitions, including the purchase of Elkhart’s United Musical Instruments in 2000. The Selmer Co. and United Musical Instruments merged into Conn-Selmer in 2003.
The Boston Globe reported Tuesday that Steinway has experienced tough times in recent years.
Piano sales fell during the recession and still haven’t fully recovered, the newspaper reported. Steinway makes about 2,500 pianos annually.
Conn-Selmer saw operational costs rise during a recent strike, according to The Globe, and Steinway Hall, a 16-story building across from Carnegie Hall in New York, had become a drag on the company. It was partly vacant for years before Steinway finally sold it for $46.3 million in June.
Theriault told The Globe that the building sale as well as improved business results increased the company’s value for Kohlberg.