Agoura Hills, CA–Instrument retailer/cataloger Guitar Center, which owns the Musician’s Friend catalog, has completed its acquisition of New York-based instrument retailer American Music Group. The newly acquired company will operate as a division of Guitar Center’s retail business and will remain a stand-alone business through its 12 band instrument stores and two catalogs.
Under the terms of the agreement, Guitar Center acquired the assets of American Music Group and related companies for total consideration of $16.9 million, including $14.4 million in cash and the balance in the form of 138,794 newly issued shares of Guitar Center stock. Guitar Center also assumed $16.7 million in American Music Group debt that has been refinanced with drawings under the Guitar Center senior debt facility; and there is a $2.5 million hold back on the transaction pending American Music Group meeting certain operating objectives for 2001. American Music Group generated approximately $30 million in revenue in 2000.