Private equity firm Kohlberg & Co. LLC is buying Steinway Musical Instruments Inc. (NYSE: LVB) for $438 million.

Steinway, through its Steinway and Conn-Selmer divisions, designs, makes and sells musical instruments, including Steinway & Sons pianos, Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones and Ludwig snare drums. The Waltham, Mass.-based company also produces and sells classical music recordings through its online music retailer, ArkivMusic.

The purchase price works out to $35 per share in cash. Steinway’s shares closed at $30.43 on June 28, the last day of trading before the deal was announced. After the announcement, the stock was trading at about $35.18 as of midday.

The deal includes a 45-day go-shop period, during which Steinway can solicit other offers.

Steinway brought in $76,803 in the first quarter of 2013, compared with $77,953 in the first quarter of 2012, according to a filing with the U.S. Securities and Exchange Commission. The company's gross profit for the first quarter of 2013 was $25,350, compared with $23,147 for the first quarter of 2012. 

Kohlberg, headquartered in Mount Kisco, N.Y., is a private equity firm that has invested more than $3 billion since it was founded in 1987. The firm recently sold Thilmany Papers, a unit of Packaging Dynamics. Kohlberg has invested in several other specialty manufacturing companies, including Trico Products Inc., which makes wiper components, Aurora Casket Co., which manufactures burial and cremation products, and Bauer Performance Sports, which manufactures hockey and lacrosse equipment. 

"Kohlberg's long history of collaboration to grow and expand some of the world's leading consumer brands makes us an ideal partner for Steinway to accelerate its global expansion, while ensuring the artisanal manufacturing processes that make the Company's products unique are preserved, celebrated and treasured," says Kohlberg partner Christopher Anderson.

Macquarie Capital and General Electric Capital Corp. are providing the debt financing to support Steinway Musical Instruments' purchase by global property investment firm Kohlberg & Co. in a a roughly $438 million deal, according to a regulatory filing on July 2.

"Our agreement with Kohlberg represents an exceptional valuation for our shareholders, while also representing an important next step in the growth of Steinway," said Michael Sweeney, chairman and interim CEO of Steinway.

The agreement includes a 45-day “go shop” period during which Steinway can seek higher bids from other investors.

Allen & Co. LLC served as Steinway’s financial adviser for the deal, while Skadden Arps Slate Meagher & Flom LLP and Gibson Dunn & Crutcher LLP provided legal advice. Ropes & Gay LLP was Kohlberg’s legal counsel. 

Steinway has been on the block for about two years. For previous coverage, see "Piano Manufacturer Pops Poison Pill," "Steinway Considers Carveout Offer" and "Steinway's CEO Steps Down."

Karen Sibayan of Mergers & Acquisitions' sister publication Leveraged Finance News contributed to this story.

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