Musician's Friend to be sold

The parent company of Internet and catalog retailer Musician's Friend, located on Chevy Way near the Medford airport, will be acquired by a private equity firm in a deal worth $2.1 billion.

Officials with Guitar Center, based in Westlake Village, Calif., said Wednesday Boston-based Bain Capital Partners LLC will pay Guitar Center shareholders $1.9 billion in cash, or $63 a share, and assume the company's $200 million debt.

The price is more than 19 times Guitar Center's expected earnings in the coming year. On the news, shares of the musical instrument retailer shot up 19.8 percent, nearly $10 a share, to a 52-week high of $59.95.

Guitar Center operates 210 stores in which it sells music instruments as well as music-related computer hardware and software.

The company also has 95 stores specializing in school band instruments for sale and rental.

Musician's Friend was founded in 1983 by Rob and Deanna Eastman in Eagle Point. Guitar Center purchased Musician's Friend for $50 million in 1999 as part of a plan to expand its Internet presence.

Reports that the company was looking for a possible buyer surfaced May 29. The deal is expected to close in the fourth quarter of this year, pending approval by the shareholders.

Bain Capital has approximately $50 billion in assets under management and has invested in or bought more than 240 companies, including Toys "R" Us, Michaels Stores, Burger King, Warner Music Group, Burlington Coat Factory, Dunkin' Brands, Shopper's Drug Mart, Sports Authority and Staples. Last week, Bain agreed to buy Home Depot's wholesale supply arm for $10.3 billion.

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