Fender IPO seen valuing guitar maker at about $395 million

Mon Jul 9, 2012 4:52pm IST

(Reuters) - Fender Musical Instruments Corp, whose guitars have been used by music legends including Jimi Hendrix and Eric Clapton, expects its initial public offering to raise as much as $160.5 million, potentially valuing the company at about $395 million.

Formed in the 1940s by Leo Fender, the company was the first to mass produce solid-body Spanish-style electric guitars, including the iconic Stratocaster.

Fender expects to sell 10.7 million shares at between $13 and $15 apiece.

It expects to have 26.4 million shares outstanding after the offering and will have a market value of about $395 million, based on the top-end of its price range.

The company will sell 7.1 million shares, while private equity firm Weston Presidio will sell 3.5 million shares.

Fender had filed for an offering of up to $200 million in March.

Post-IPO, Weston Presidio will own about 17.7 percent of the company. The firm owns 43 percent of Fender currently.

The company said it does not anticipate paying cash dividends currently.

J.P. Morgan, William Blair, Baird, Stifel Nicolaus Weisel and Wells Fargo Securities would be underwriting the offering, the company said in a filing with the U.S. Securities and Exchange Commission.

Fender, which had net sales of $700.6 million in the fiscal year ended January 1, said it plans to apply to list on the Nasdaq under the symbol "FNDR."

(Reporting by Jochelle Mendonca in Bangalore; Editing by Maju Samuel)