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Kaman sold to Fender


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Kaman Announces Agreement to Sell Music Segment

BLOOMFIELD, Conn., Oct. 29 /PRNewswire-FirstCall/ -- (Nasdaq: KAMN) Kaman Corporation announced today that it has entered into a definitive agreement to sell its wholly owned subsidiary, Kaman Music Corporation (KMC), to Fender Musical Instruments Corporation (FMIC) of Scottsdale, Arizona for approximately $117 million in cash, subject to specified post closing purchase price adjustments. The stock purchase agreement, which contains customary representations and warranties and covenants, has been approved by the Kaman Board of Directors. Closing is targeted to occur prior to January 1, 2008, subject to the satisfaction of customary closing conditions, including termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

KMC, which comprises the company's entire Music segment, owns Ovation Guitars, LP and Toca hand percussion products, Gibraltar Hardware, Genz Benz Amplification, Hamer Guitars, and is the exclusive U.S. sales representative for Sabian Cymbals, and exclusive worldwide distributor of Takamine Guitars and Gretsch Drums. Privately held FMIC is the world's leading electric guitar manufacturer. In addition to owning the world-renowned Fender brand name, FMIC also owns Guild guitars, Charvel Guitars, Jackson Guitars, SWR Bass Amplification, Tacoma Guitars, EVH products, and is the exclusive worldwide distributor of Gretsch Guitars.

Kaman Chairman and CEO, Paul Kuhn, stated, "We have invested in KMC over the years to build our leadership position in the industry and KMC has been a positive contributor to the overall success of Kaman Corporation. However, our longer-term growth strategy has evolved to a focus on the aerospace and industrial distribution segments, which has meant finding a new home for KMC. We are very pleased to have attracted a strategic buyer of Fender's stature, and we are confident that KMC will have a bright future under Fender's leadership."

"We are delighted to welcome the Kaman Music Corporation into the Fender Family," said Bill Mendello, Chairman and Chief Executive Officer of Fender Musical Instruments Corp. "KMC is one of the most respected companies in the musical instrument industry. We have very similar cultures that have been developed over many years. The distribution expertise that Kaman Music brings to the music marketplace will complement and strengthen FMIC's growing operational excellence and ultimately offer dealers and consumers a better way to access a wider variety of high-quality music products and accessories."

Edward Miller, President of Kaman Music Corporation added, "There is great synergy between Kaman Music and Fender, both of which are deeply rooted in the long history and colorful culture of popular music. The acquisition of Kaman Music by Fender forms the most dynamic partnership of manufacturing and distribution expertise in the music industry."

Kaman was advised by Lazard and the law firm, Skadden, Arps, Slate, Meagher & Flom, LLP. Fender was advised by the law firm, Sullivan & Cromwell LLP.

SOURCE Kaman Corporation

CONTACT: Russell H. Jones, SVP, Chief Investment Officer & Treasurer of

Kaman Corporation, +1-860-243-6307, russell.jones@kaman.com

Please note I don't know what this means for Hamer.

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As long as Hamer doesn't suffer the same effects that Jackson/Charvel did, I'll be happy.

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I'm wondering if that meant that our favorite dealers will now be our favorite Fender dealers? I've been wanting to look into fender amps, but I just can't bring myself to go into one of those super stores....

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Thank god it wasn't to Gibson...

Jeez - that's big news. Hope they maintain the integrity of the brand, keep the gang in New Hartford intact and keep the dealer relationships stable. I would imagine that they would expect greater production though.

Expect to hear collector terms like "pre-Fender" now...

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Expect to hear collector terms like "pre-Fender" now...

That will become the new ebay catch phrase.

Something tells me this is not a good thing for Hamer lovers - I hope I'm wrong.

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Introducing: The Squier Standard. B)

Forgive my pessimism, but I don't see how it improves the brand. Small-scale production and attention to detail seem like they'd be foreign concepts in an FMIC world. There may be truth to that "pre-Fender" term.

We may need passports for the factory tour.

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What about outstanding Custom Orders due after January 2008?

I am thinking of that question also. Is this the end of Hamer. Are they going to kill Hamer as they did Guild?

Hamer please chime in...

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Uh-Oh! Hopefully Fender will leave the Hamer USA line alone and just focus on the import stuff instead of strip-mining the brand. Time will tell, but I too am glad I already got my custom order out of the way.

-Austin

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What about outstanding Custom Orders due after January 2008?

I am thinking of that question also. Is this the end of Hamer. Are they going to kill Hamer as they did Guild?

Hamer please chime in...

Kill Guild???? Really???

Yes, they moved production from Rhode Island. Twice maybe. But they're still making some very nice Guild guitars. I think unfortunately they're also importing guitars under the Guild name, but Hamer already does that.

If Jol has turned Hamer USA into a profitable company (and I wouldn't doubt that with increasing prices, brand popularity and significant backorders we hear about), there would be no reason to kill Hamer. In fact, while we're speculating, I can see Fender wanting Ovation and some of the other divisions but selling off Hamer USA to remain a small builder.

I wouldn't panic.

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Although this is no surprise that Kaman sold off the music division, again it will take some time to absorb this all in. Hamer USA is not the bulk of Kaman Music Corp.

I am in agreement, I hope they keep the current Hamer Racing Team together but I think there are going to be some posititives. Hopefully, there will be more of an open thought to certain custom orders. Want that California set neck. I think that might not be such an issue anymore.

I remember how people reacted when Kaman first bought out Hamer. That wasn't pretty either. Lots of mudslinging and pre - Kaman phrases being used. The faithful has had the ability in the past to get their input into the company and the current line of Hamer has made some the best most consistent instruments.

Ovation owners are probably thinking the same things.

I am going to keep a very open mind about this. I don't think it ever hurts to take a company private.

Maybe Hamer will be culled out in the future and sold to another private party.

Just a thought.

Hamerica

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At first glance, this scares the heck out of me...

But as long as they are smart enough to leave Hamer alone or fund its expansion in a logical manner, it may not be a bad thing.

When I bought my Guild Bluesbird (now on its way to Crabby) a few years ago, I talked to a Fender rep about why the Guild electrics disappeared. He told me at that time that there were discussions about making certain models such as the Bluesbird, Starfire IV, and one of the big jazz boxes, but they needed a more diverse product line to compete with Gibson, etc. Maybe the addition of Hamer will make that happen. A fusion between Hamer models and the former Guild models would certainly be a burr under Gibson's saddle!

I agree with Hamerica...there was a lot of bad-mouthing going on with the Kaman acquisition and relocation, but IMHO the product has just gotten better.

Bloozguy

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I dunno. It does gives Fender a sure-fire Gibson killer.

Hamer never has been a Gibson killer, even at their peak production. Gibson throws more into the trash bin than Hamer currently produces.

Kaman left Hamer alone. No telling what Fender will do with Hamer. I hope we get a reassuring 'open letter' from them soon.

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