Rutland portfolio company, The Music Group has sold its wholly-owned subsidiary Rico holdings for $22.2m to J.D’Addario & company. The Music Group was formed by Rutland in February 2003 to acquire the music instrument manufacturing business of Boosey & Hawkes for £33.2m.
Rico is a California-based manufacturer and distributor of reeds and mouthpieces for woodwind instruments. The net proceeds from the sale will be used to repay debt of $16.8m and make a distribution of the balance to fund investors. Following the disposal of Rico, The Music group has reduced bank debt from £19.5m at acquisition to around £8m at current exchange rates.
Nick Morrill of Rutland, said: “The disposal of Rico is the first major step in our repositioning of The Music Group. Rico is a mature business whose operating margins since acquisition have been improved through investment in automation and better control of costs. It is sensible for us now to realize value and concentrate our energies on those parts of the group where the opportunities for performance are greater.”