Jan 28, 2020 - Economy & Business

Guitar-maker Fender gets new majority owner

Fender Stratocaster guitars
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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