direct mail cataloger and web based retailer of musical instruments and accessories

$140M Revenue

Company Overview

An internet retailer and cataloger of musical instruments. The Company sells band, orchestral and rock ‘n roll “combo” instruments. The Company pioneered the use of catalogs to sell musical instruments, and today its master catalog is considered the definitive product reference guide in the industry.

Engagement Overview

Despite a leading industry position as a musical Instrument retailer, and an outstanding reputation for product line breadth and customer service, the Company began experiencing financial difficulties, much of which stemmed from litigation with minority shareholders.

Additionally, the Company faced increased industry competition, coupled with issues arising from the consolidation of multiple warehouses into a new distribution center, and a software conversion.  Continuing losses and the minority shareholder litigation eventually led to a bankruptcy filing.

In a short period of time, FDP contacted over 100 industry and financial buyers leading to multiple visits and offers from which to choose. 

Fort Dearborn represented the Company prior to its bankruptcy filing in a financial consulting role, negotiating with the Company’s lender for continued time and a DIP financing, while simultaneously working on preparing for bankruptcy and generating a viable “stalking horse” bidder.

When the approved “stalking horse” terminated its bid, Fort Dearborn quickly negotiated a deal with the industry’s largest participant, who had expressed strong interest, but was initially outbid in the earlier sales process.

Results

The FDP sale process resulted in a transaction that closed within 120 days of our retention, at an attractive valuation, despite the need to consummate a deal with a second buyer.

Fort Dearborn achieved this valuation and quick closing despite continuing losses throughout the sales process and softness in the industry. 

FDP News

Sep - 20

Fort Dearborn Advises Motor Distributor

Fort Dearborn Partners served as a financial advisor for the refinancing of a $3.5M Line of Credit and $2.2M mortgage for a $20 million Illinois-based motor distributor coming... Read More

Jul - 20

Fort Dearborn Advises Private High School

Chicago, IL - Fort Dearborn Partners is pleased to announce that we served as exclusive financial advisor to a private high school for the refinancing of $13,000,000 in... Read More

Jul - 20

July 2020 Newsletter

Since early March, we have monitored the impact of COVID-19 on our client base. As expected, early results display widely divergent financial performance - some industries have... Read More