Jan 28, 2020 - Economy

Guitar-maker Fender gets new majority owner

Dan Primack

Fender Stratocaster guitars at a Fender manufacturing facility in California. Photo: Robyn Beck/AFP via Getty Images

Servco Pacific acquired a majority stake in Fender Musical Instruments by acquiring shares from co-investment partner TPG Growth.

Why it matters: Jimi Hendrix played a Fender at Woodstock. Bob Dylan played one in his first-ever electric performance. David Gilmour played on one The Wall. Kurt Cobain reveled in smashing them on stage.

Servco first invested in Fender in 1985, buying it from CBS, before selling to a private equity firm in 2001 and then re-investing alongside TPG Growth in 2012.

The bottom line: Both Fender and rival Gibson have long histories of private equity ownership, but Fender avoided Gibson's bankruptcy pitfall by focusing more on female buyers (who make up around 50% of its first-time sales) and scaling up an online learning platform (Fender believes that new guitar owners spend four times more on lessons than on equipment).

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Guitar-maker Fender gets new majority owner

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