Fender Musical Instruments, whose guitars have been used by music legends including Jimi Hendrix and Eric Clapton, expects its initial public offering to raise as much as $160.5 million, potentially valuing the company at about $395 million.
Formed in the 1940s by Leo Fender, the company was the first to mass-produce solid-body Spanish-style electric guitars, including the iconic Stratocaster.
Fender expects to sell 10.7 million shares at between $13 and $15 apiece, according to a filing Monday with the Securities and Exchange Commission. The company didn’t disclose a date for the IPO.
It expects to have 26.4 million shares outstanding after the offering and would have a market value of about $395 million, based on the top end of its price range.
“Brand-name offerings generally do well because investors gravitate towards companies that have been in business for a really long time,” said Scott Sweet, managing partner at IPO Boutique, an IPO research firm.
“The demand for its shares will be good,” he added.
The company is valued at about 20 times its 2011 net income.
