Rutland Fund Management has agreed a deal with UK music company Boosey & Hawkes to acquire its musical instrument unit, almost a year after initial reports of the unit’s sale were announced.
Rutland Fund Management, the private equity fund managed by Rutland Trust, has agreed to pay £33.2m for the business, which was valued at closer to £40m in 2002, when Rutland was first linked with the business.
In late 2001, Boosey & Hawkes was the subject of a £50m public-to-private offer from Graphite Capital and UK-based Music Sales. Boosey & Hawkes rejected the deal but confirmed that it had instructed Deutsche Bank to look into a possible sale of its instrument division, which received interest from Close Brothers Private Equity and 3i prior to the Rutland offer.
Boosey & Hawkes’ instrument division is a musical instrument and accessory manufacturer and distributor with manufacturing operations in Germany, France, the UK, US and India. The division employs around 1500 people and produces several major brand names, including Buffet Crampon (clarinets), Höfner (guitars) and Besson (brass instruments).
The acquisition will be funded with £14.6m from The Rutland Fund and with acquisition debt provided by Royal Bank of Scotland. The Rutland Fund will hold 85 per cent of the equity with the senior management of the Group holding the balance.
Investment trust The Rutland Trust plc made a £100m commitment to the Rutland Fund, with the balance of the total £210m raised in April 2001 coming from third party investors. The investment in The Music Group, the company formed to acquire the Boosey & Hawkes unit, will be the fund’s fifth investment and will take the aggregate investment of the fund to date to approximately £89m. Rutland recently announced its exit from Edinburgh Woollen Mill, which it acquired for £49m in July 2001, to management in a £68m transaction.