Don’t Look Now But Fender Has A New Owner

Fender and Servco image

The words “Fender has a new owner” will put fear into the hearts of musicians as memories of the CBS acquisition and the debacle that followed loom large. The quality control went out the window and new instrument duds nearly doomed the company then, so don’t look now – Fender has a new owner once again.

This time things don’t look so ominous as longtime investor Servco Pacific entered into an agreement with co-investor TPG Growth to acquire a majority ownership in the company.

Under joint ownership of Servco and TPG the company has prospered and today is one of the largest and healthiest musical instrument brands on the planet. Servco has pledged that nothing will change even though the percentage of ownership has, and it would be foolish to want to change a good thing.

Servco actually has had a long-standing relationship with Fender that goes back to the beginning of of the company when it became a distributor for its products. Then it helped back president Bill Shultz’s buyout from CBS in 1985. More recently, Servco increased its stake by purchasing Weston Presidio‚Äôs shares in Fender, then recruited TPG Growth as an equal-stakes partner in ownership, setting the stage for this eventual ownership turnover.

As we’ve seen in virtually every industry, things can get dicy when private equity investors take over a company. What usually happens is that the company begins to sell its assets in order for the equity firm to recoup its investment first, then profit later. The result is an acquisition that’s a mere shell of its former self.

This probably would have happened by now if Servco was going to do that with Fender though. Instead of selling assets, it’s provided needed finances to bring the company to the forefront of the MI business, especially with online initiatives like Fender Play and Fender Songs that appear to be paying off.

As always, it’s worth keeping an eye out for the negative traits of a sell-off, but all indications are that we won’t be seeing that here. In other words, business as usual for Fender.

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