WESTLAKE VILLAGE, CA — Guitar Center, Inc. today announced that it has signed a definitive agreement to be acquired by affiliates of Bain Capital Partners, LLC, a global private investment firm. The total transaction value, including assumed debt, is approximately $2.1 billion.
FOH editor Bill Evans commented, “Unlike some other acquisitions recently announced, this does not appear to be a typical Wall Street grab and dash but rather a way to allow the chain to continue to grow without the often unrealistic expectations shareholders can make of a public company. In recent years, GC has grown from the 50 range to more than 200 stores currently and is expected to have well over 300 by next year." This agreement represents the culmination of an auction process, led by Goldman, Sachs & Co., to solicit interest in a potential acquisition of the company. The Board of Directors of Guitar Center, acting on the recommendation of a Special Committee of independent directors, has approved the merger agreement and recommends that Guitar Center stockholders support the transaction. Under the terms of the merger agreement, stockholders will receive $63.00 in cash in exchange for each share of Guitar Center common stock they own. This represents a 26% premium over the closing price of Guitar Center's shares on June 26, 2007.
The transaction is expected to close in the fourth quarter of 2007 and is subject to customary closing conditions, including the approval of Guitar Center's stockholders.
Marty Albertson, Chairman and Chief Executive Officer of Guitar Center, stated, "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. 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."
For further information, please see Investor Relations at www.guitarcenter.com.
