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| The Ovation Fan Club | ||
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| Random quote: "Got time to breathe, got time for music." --Briscoe Darling. |
 Fender-Ovation connection?
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| Forums Archive -> The Vault: 2008 | Message format | |
gglide |
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Joined: February 2008 Posts: 40 Location: AKRON, OHIO | Maybe a dumb question ... BUT ... Im new here and I keep hearing comments about Fender and Ovation, Whats the connection??? THANKS!!! Gary :confused: | ||
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| Old Man Arthur |
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Joined: September 2006 Posts: 10777 Location: Keepin' It Weird in Portland, OR | Fender don't know how to make acoustics, so it bought a company that does... Sorry, that was rude... | ||
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| gglide |
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Joined: February 2008 Posts: 40 Location: AKRON, OHIO | HI! How long has Fender owned Ovation ??? ... AND ... WHO ownes Fender?? Gary :eek: | ||
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| Captain Black |
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Joined: June 2007 Posts: 270 Location: Yorkshire, England | Not long...... I'm just waiting for the Breadocaster and the Telewinner models to be invented ! Clyde | ||
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| Tupperware |
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Joined: January 2005 Posts: 4903 Location: Phoenix AZ | Jan 1st. Fender aquired Kaman Music, the musical instrument part of Kaman Corp. Fender (FMIC) is a privately owned company which has been rumored to be going public since the invention of the whammy bar. Dave | ||
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| Weaser P |
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Joined: October 2005 Posts: 5330 Location: Cicero, NY | "...which has been rumored to be going public since the invention of the whammy bar." Nice - didn't see that one coming at all, Dave. Great line. :D | ||
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| an4340 |
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Joined: May 2003 Posts: 4389 Location: Capital District, NY, USA Minor Outlying Islands | As I've said before, after Kaman didn't buy Fender, in 1984 / 85 Bill Schultz and John McLaren, formerly of Yamaha!, then the executives at Fender, led a management buyout from CBS for Fender. As far as I know, it is still a privately held company, in theoretical structure, just like any other private business. Since they aren't publicly traded, it's hard to find info about what's going on there. Schultz died. He was well loved. The current fellow is named Janopaul, I believe he's an accountant. I know nothing about him. Anyone here know anything about him? | ||
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| an4340 |
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Joined: May 2003 Posts: 4389 Location: Capital District, NY, USA Minor Outlying Islands | This is from DEcember 2007. Fender buys Kaman: acquisition creates $700 million player with extensive brand stable. Fender management stresses a "no change" policy at Kaman. Music Trades • Dec, 2007 • FOREFRONT: NEWS * ANALYSIS * INFORMED OPINION Article Tools T | TTEXT SIZE: Add to My Bookmarks Adds Article to your Entrepreneur Assist Bookmark page. FENDER MUSICAL INSTRUMENTS stunned the industry by entering into an agreement to acquire Kaman Music Corporation, a subsidiary of Kaman Corp., for approximately $117 million cash. The block buster transaction creates a music products company that trails only Yamaha in scale, boasts a broad array of fret, percussion, and accessory product lines, and will have estimated annual sales approaching $700 million. Fender's brands include Fender guitars, amps, and pro sound; Squier, Charvel, Jackson, Gretsch, Guild, and Tacoma guitars; and SWR amps. Kaman's product offerings include Ovation, Takamine, and Hamer guitars; Gretsch, Gibralter, LP, and Toca percussion products; and Genz Benz amplifiers. The transaction is slated to close by year's end. In announcing the acquisition, Fender management stressed that there would be little or no change in the operations and strategy of Kaman Music. Ed Miller, a 35-year Kaman veteran will continue as president, joined by Paul Damiano, vice-president of sales and marketing, and Larry Dunn, vice president of finance. The two companies' sales and credit organizations will remain independent, and Kaman Music headquarters will remain in Bloomfield, Connecticut. "Kaman Music is a successful, well-run business, and the last thing we want to do is try to "fix what isn't broken," said Bill Mendello, chairman and CEO of Fender Musical Instruments Corp. "Kaman Music will operate as a separate division of FMIC, and Ed Miller will be the only direct report to FMIC headquarters in Scottsdale." [ILLUSTRATION OMITTED] Although Fender and Kaman share many of the same customers in the guitar market, Mendello said he was attracted to Kaman because he felt the companies "didn't have a lot of overlap." He elaborated, "Kaman is extremely strong in every facet of percussion, a market where Fender has no presence at all. Kaman is also the industry leader in the accessories business, a market where Fender is only a minor player." Discussing the relative positions of the combined companies' guitar offerings, he added, "Ovation is a unique guitar line that doesn't compete with anything else on the market, and the Takamine line really complements Fender's acoustic guitar offerings, well priced between our Fender acoustic line and our U.S.-made Guild line." [ILLUSTRATION OMITTED] Although emphasizing that Kaman would remain an independently run operation, Mendello and Fender president Matt Janopaul pointed to a number of potential synergies between the two companies. Janopaul praised Kaman's electronic "B-to-B" system, which enables dealers to place orders, check product availability, review past purchases, and access catalogs and contract materials online, as "the best in the business," adding "it's something that Fender has been exploring." He also cited Kaman's highly efficient distribution and logistics network. Fender currently has a single 588,000-square-foot distribution center in Ontario, California, that serves the North American market, while Kaman operates four centers in Louisville, Kentucky; Portland, Tennessee; Bloomfield, Connecticut; and Ontario, California, as well as one in Canada. "We will investigate how we might work together to improve delivery service on all of the Fender and Kaman product offerings," he said. [ILLUSTRATIONS OMITTED] During the due diligence process leading up to the acquisition, Janopaul had the opportunity to visit the new Takamine acoustic guitar factory in Skashita, Japan. "This is one of the most advanced guitar factories anywhere in the world," he said. "It is the kind of operation that may be a resource to the entire Fender organization." In nearly all of the major European countries, Fender currently markets its products directly through a wholly owned distribution arm. Kaman, by contrast, relies on a network of independent distributors. Mendello said, "We will have a product-by-product review to see if it makes sense to distribute some of the Kaman lines through Fender Europe at an appropriate time. We recognize that in some instances it may work, and others it won't. We are definitely not going to force anything." Fender's acquisition of Kaman is the culmination of a subtle but significant corporate transformation that began in 2001. For the better part of 60 years, Fender existed exclusively as a corporate vehicle to manufacture and sell products based on the groundbreaking designs of Leo Fender. In 2002, however, the company broadened its reach with the acquisition of the Charvel and Jackson guitar lines, and a licensing agreement to manufacture and distribute the Gretsch line of guitars. A year later Fender acquired the SWR amplification line. New product lines necessitated a new management structure to avoid changing unique brands with their own distinctive character into something they are not. Janopaul explains, "At Fender we view ourselves as stewards of great brands. We have shown that we can grow and prosper with diverse product lines, not just Fender." Looking for additional opportunities to apply this brand management expertise, Fender management reviewed most, if not all, of the recent music companies that have come up for sale. Mendello said, "We explored the possibility of acquiring Midco, MBT/Musicorp, and Latin Percussion, because we felt they could have put us in the percussion and accessory markets. But the timing just didn't seem right. Kaman, however, was a perfect fit at the perfect time. They had great management in place, a leadership position, and a proven record as a good brand steward. Whenever I asked dealers who they liked doing business with, Kaman was always at the top of the list." (Ironically though, with the acquisition of Kaman, Fender ended up owning the three companies it previously passed on. Kaman acquired Latin Percussion in 2002, MBT acquired Midco in 2004, and Kaman ended up acquiring MBT in 2005.) The origins of Kaman Music date back to the early '60s and a decision at the Kennedy administration's Department of Defense. Charles Kaman was a brilliant aerospace engineer who, in 1945, had developed a unique new helicopter that was enthusiastically embraced by the U.S. Navy. However, in 1962 Secretary of Defense Robert McNamara cut Kaman's helicopter from the Navy fleet, pushing his aerospace company to the brink of bankruptcy. Charlie Kaman had been an avid guitarist in his youth and was even offered a position in the Harry James orchestra. So it was natural for him to turn to music when he began looking for ways to diversify his struggling helicopter business. Applying advanced material technologies to guitar design, in 1966 he introduced the Ovation roundback guitar. Subsequently, to secure distribution for his new guitar, he acquired Coast Wholesale and C. Bruno, the two distributors that became the framework for Kaman's current distribution business. In recent years Kaman Corporation evolved into a $1.2 billion (sales) conglomerate, dominated by an aerospace manufacturing business and an industrial distribution ness. For the better part of a decade, several of Kaman's board members viewed the music division as a less than ideal strategic fit, and debated selling the business. However, divestiture plans were voted down by the Kaman family, which had a strong sentimental attachment to the music division and controlled the company through a non-traded class of voting stock. Two years ago, when the Kaman family converted its voting shares into common stock, the stage was set for the board to re-address the future of the music division. Ed Miller, who was privy to much of the board's strategic discussions, said, "Kaman was a great corporate parent and they consistently invested in the music business. But they felt that their business was more attractive on Wall Street as a straight aerospace company. The acquisition of Kaman Music by Fender will create the most dynamic partnership in the music industry. Personally, I think our company will be better off, owned by a group that is completely invested in and committed to the music industry." Last June Fender negotiated its long-term debt under more favorable terms, paving the way for acquiring Kaman. Over a six-month period, talks took place between a small group of Kaman's and Fender's top management. Efforts to keep the talks confidential were obviously successful, as evidenced by the widespread surprise when the acquisition was announced at the end of October. Janopaul said, "Out of respect to the entire Kaman group, we felt an obligation to keep this quiet." Going forward, Kaman Corporation has allowed Fender to use the Kaman Music trademark for a period of three years. However, Fender management will immediately begin referring to the newly acquired music business as "KMC." The combination of two of the top industry firms has prompted widespread speculation about an imminent initial public stock offering. Janopaul commented, "We have a long term strategy in place for making Fender and KMC the best in the business worldwide, and our efforts are directed at executing that strategy and taking care of our customers and dealers." | ||
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| Oddball |
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Joined: March 2007 Posts: 841 Location: CA | Wait, can I play? Stratadamas Televiper Legendocaster Jagwinner VXSG (oh, wait, that would be Ovation and Gibson...) Ovander precision bass Jassute Vipe-stang Okay, I'm spent. Joke over. | ||
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| Chuck (Retired Navy) |
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Joined: July 2002 Posts: 280 Location: Waterloo, IL | I have been wondering if Fender had bought Kaman, are just Ovation. Now I have the information to digest better. Nice to be able to access the board when I am out on the road. Posted this from Menominee, Wisconsin. Next time? | ||
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