Steinway Announces Agreement for Private Placement of Common Stock; Will
Appoint New Director
WALTHAM, Mass., Nov. 5
WALTHAM, Mass., Nov. 5 /PRNewswire-FirstCall/ -- Steinway Musical Instruments,
Inc. (NYSE: LVB), one of the world's leading manufacturers of musical
instruments, today announced that it has signed an agreement with Samick
Musical Instruments Co., Ltd. for a private placement of 1.7 million shares of
its ordinary common stock at a price of $16 per share, approximately 37% above
the closing market price on October 28, 2009, the date the parties set the
purchase price. Steinway intends to use the proceeds of approximately $27
million to retire outstanding debt and for general corporate purposes. Samick
was also granted the right to purchase by March 31, 2010 an additional 1.7
million shares of ordinary common stock at an exercise price of $16 per share.
The placement will bring Samick's holdings in Steinway to approximately 1.9
million shares. Steinway's Chairman, Kyle Kirkland, and CEO, Dana Messina,
continue to hold 100% of the Company's Class A shares which represent over 80%
of the voting power of the total common stock.
In connection with the placement, Mr. Jong Sup Kim, Chairman of Samick Musical
Instruments Co., Ltd., will join the Board of Directors of Steinway Musical
Instruments bringing the total number of directors to nine.
Dana Messina commented, "I have known Mr. Kim for several years and am very
pleased to have a director with his reputation and insight on our board and
invested in our future. He has always had a high regard for our products and
is very optimistic about Steinway's future in Asia and other parts of the
world. Samick's investment is a clear endorsement of our long term strategy
and future prospects."
Kyle Kirkland added, "Given current economic conditions, we've seen several
opportunities to increase our market presence in all areas of our industry.
Samick's minority investment provides added liquidity, enabling us to move
aggressively on opportunities as they arise."
J. S. Kim is considered one of the most successful business leaders in Korea,
owning twelve companies in various industries. He is the controlling
shareholder of Samick and has served as its chairman for the last seven years
where he successfully engineered a turnaround to profitability. Mr. Kim also
serves as the chairman of Speco Co., Ltd., one of Korea's leading road
building machinery companies. He is a graduate of the prestigious Seoul
National University in Seoul, Korea.
Mr. Kim commented, "I believe Steinway Musical Instruments offers tremendous
investment value even at a premium to the current market price. The Steinway
piano and brand are incomparable worldwide and it is an honor for us to be an
investor in the Company. Steinway has great potential throughout the world and
is well positioned to capitalize on near term growth opportunities in the
Asian piano markets. As financial investors, we look forward to this
opportunity to profit from Steinway's world renowned products, proven
management and superior market presence."
About Steinway Musical Instruments
Steinway Musical Instruments, Inc., through its Steinway and Conn-Selmer
divisions, is one of the world's leading manufacturers of musical instruments.
Its notable products include Bach Stradivarius trumpets, Selmer Paris
saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones, Ludwig
snare drums and Steinway & Sons pianos. Through its online music retailer,
ArkivMusic, the Company also distributes classical music recordings. For more
information about Steinway Musical Instruments, Inc. please visit the
Company's website at www.steinwaymusical.com .
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
This release contains "forward-looking statements" which represent the
Company's present expectations or beliefs concerning future events. The
Company cautions that such statements are necessarily based on certain
assumptions which are subject to risks and uncertainties which could cause
actual results to differ materially from those indicated in this release.
These risk factors include the following: changes in general economic
conditions; reductions in school budgets; increased competition; work
stoppages and slowdowns; ability to successfully consolidate band
manufacturing; impact of dealer consolidations on orders; ability of dealers
to obtain financing; exchange rate fluctuations; variations in the mix of
products sold; market acceptance of new products; ability of suppliers to meet
demand; concentration of credit risk; fluctuations in effective tax rates
resulting from shifts in sources of income; and the ability to successfully
operate acquired businesses. Further information on these risk factors is
included in the Company's filings with the Securities and Exchange Commission.
Contact: Julie A. Theriault
SOURCE Steinway Musical Instruments, Inc.
Contact: Julie A. Theriault of Steinway Musical Instruments, Inc.,
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