Steinway Signs Agreement to Sell West 57th Street Building
WALTHAM, Mass., March 26, 2013
WALTHAM, Mass., March 26, 2013 /PRNewswire/ --Steinway Musical Instruments,
Inc. (NYSE: LVB), one of the world's leading manufacturers of musical
instruments, today announced that it has entered into an agreement with JDS
Development Group to sell its interest in the Steinway Hall building on West
57th Street in New York City for $46 million subject to an upward adjustment
associated with certain post-closing conditions. The Steinway Hall building,
which is subject to a land lease, is a 247,000-square-foot, 16-story boutique
office building that houses the company's flagship retail showroom.
Under the terms of the transaction, Steinway has the right to occupy the
premises rent free for a period of 14 months after closing and to extend that
period for an additional 4 months subject to an agreed upon rent.
"Steinway remains committed to providing the full range of services to the
artists and patrons who have cherished Steinway Hall since it opened in 1925,"
said Michael Sweeney, Chairman and CEO. "Given this history, the Board took
great care to balance the needs of all our constituencies – artists, patrons
and shareholders – in reaching the decision to sell the company's interest in
the building. An important consideration was the significant investment
required to maintain the building's infrastructure and appearance."
Sweeney added, "Over the next year or so, we will be preparing for the
creation of a 21^st century Steinway Hall in Manhattan. Our Concert & Artist
division is working on designs for a space that meets the needs of today's
artists and customers just as the Steinway family conceived our current
location nearly 100 years ago. We're excited about the opportunity to continue
serving the musical and cultural community while preserving the Steinway
The purchaser made a deposit of $5.6 million upon signing the purchase and
sale agreement. After payment of associated transfer taxes, the company
expects this transaction to generate cash proceeds of approximately $43
million upon closing. In addition, the rent Steinway currently pays under its
land lease will terminate upon closing. The transaction is expected to close
within the second quarter, at which point the company expects to recognize a
taxable gain of $22 million on the sale.
"This transaction further strengthens our healthy balance sheet and clears the
way for Steinway to focus all of its attention on maximizing the value of the
company's core musical instruments business. The Board is now in a position to
begin considering options that are in the best interest of the company's
shareholders for deploying the net cash proceeds harvested from this non-core
asset," said Sweeney.
About Steinway Musical Instruments
Steinway Musical Instruments, Inc., through its Steinway and Conn-Selmer
divisions, is a global leader in the design, manufacture, marketing and
distribution of high quality musical instruments. These 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
produces and distributes classical music recordings. For more information
about Steinway Musical Instruments,Inc. please visit the company's website at
"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; 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;
failure to consummate the sale of the West 57^th Street building; and
fluctuations in effective tax rates resulting from shifts in sources of
income. Further information on these risk factors is included in the company's
filings with the Securities and Exchange Commission.
Company Contact: Investor Relations Contact:
Julie A. Theriault Harriet Fried / Jody Burfening
Steinway Musical Instruments, Inc. LHA
(781) 894-9770 (212) 838-3777
SOURCE Steinway Musical Instruments, Inc.
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