Steinway Musical Instrument Holdings Inc. will shortly be listed on the New York Stock Exchange. This means that (almost) anyone will be able to purchase a part of this iconic musical instrument conglomerate.
On April 14th 2022 the company lodged a Form S-1 with the U.S. Securities and Exchange Commission. This is the first stage in the process of having part of its Class A common stock listed on the New York Stock Exchange.
Details of the sale timetable, the amount of stock, and the price range have yet to be finalised. However, if you are interested in taking a stake in this world-renowned organization more details are shown at the end of this piece.
A Brief History
The Steinway story starts back in 1853 with German immigrant Heinrich (Henry) Englehard Steinweg. He was a cabinet maker by trade, but had a great interest in music, and had made his first piano back in 1836.
Prompted by a strike at Bacon & Raven, then New York’s largest piano manufacturer, Steinweg and his family began making pianos in a rented loft on Manhattan’s Varick Street (no. 85). The name was changed to Steinway, it sounded more “American”, and the business grew rapidly. Larger premises were required and in 1860 Steinway built a new factory on Park Avenue.
Although responsible for many important innovations, the company was best known for the exceptional quality of its instruments.
In 1866 William (Wilhelm) Steinway, Henry’s son, inaugurated Steinway Hall – a 2,000 seater auditorium, and until the opening of Carnegie Hall in 1891, this was the cultural focus of New York.
It became clear that central Manhattan wasn’t the best place to make pianos, so in 1873 the company purchased 400 acres in Astoria (Queens), on Long Island. By 1910 the whole production operation had moved out to this site.
In 1880 William opened a factory in Hamburg (Germany). Steinway was by then an international brand and he wanted to challenge the dominance of the likes of Bechstein, Blüthner and Ibach in Europe.
Henry Z Steinway, the founder’s great-grandson, was the last family member to be company president, a position held from 1956 to 1977.
Steinway’s Previous Owners
In 1972, the Steinway family sold the company to the Musical instrument Division of CBS. The reason for the sale was stated as “…the classic problem of taxes on estates”.
CBS managed the company until 1985 when it was acquired by a group of Boston businessmen as Steinway Musical Properties Inc.
In 1995 this conglomerate was sold to Selmer Industries, and with the addition of some of their brands became Steinway Musical Instruments.
In 1996 the company was listed on the New York Stock Exchange for the first time under the stock symbol LVB (for Ludwig van Beethoven). And until 2013 the Samick Music Corporation was the largest shareholder. However, in August that year, a bid of $512million from hedge fund manager Paulson & Co Inc., founded by billionaire John Paulson, was accepted by shareholders. Steinway became a private company again.
Paulson’s interest in Steinway stemmed from his love of the instrument. At the time of acquiring the business, he personally owned three Steinway pianos: a Model M studio grand; a larger Model O living room grand; and a Model B “classic” grand.
Steinway is a prestige brand and has attracted much interest over the years. In 2018 an offer of $1 billion for the company was supposedly made by Chinese government owned China Poly Group Corp. It was rejected.
Now Paulson is relisting the company on the NYSE, this time with the stock symbol STWY. Paulson will however retain 50% of the voting power according to Form S-1.
Steinway Musical Instrument Holdings is more than just a piano manufacturer. It makes, markets, and distributes a range of premium quality musical instruments. Its brands include Steinway & Sons (pianos), Steinway Spirio (high-resolution player pianos), Boston (pianos), Essex (pianos), Bach (trumpets, etc.), C.G.Conn (various brass inc. horns), King (marching brass), Selmer (various brass inc. saxophones), Leblanc (clarinets), Armstrong (flutes, piccolos), Holton (various brass), Glaesel (violins, etc.), Sherl & Roth (violins, etc.), WM Lewis & Son (violins, etc.), Musser (percussion), and Ludwig (percussion).
The company also owns a portfolio of 33 retail showrooms in prime locations — 16 in the US, 11 in Europe, and 6 in the Asia/Pacific region. It has a network of some 200 authorized dealers with a combined total of around 300 showrooms.
This is a profitable company and it has benefitted from increased demand for musical instruments over the recent lockdown periods. Revenue rose from $415.8 million in 2020 to $538.4 million in 2021, with net income rising from $51.8 million to $59.3 million.
The offering will be made only by means of a prospectus. Copies in the U.S. will be available from:
Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1- 866-471-2526, facsimile: 212-902-9316, or email: [email protected];
BofA Securities, Inc., Attention: Prospectus Department, 200 North College Street, 3rd Floor, Charlotte, NC 28255- 0001, or email: [email protected]; or
Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (888) 603-5847, or email: [email protected].
Note: This article should in no way be considered financial advice.
Please SUBSCRIBE NOW to receive more news from the world of pianos…