Last week, the company closed on the sale of Steinway Hall just down the street from Carnegie Hall, its flagship showroom in Manhattan where generations of pianists have taken pianos for a spin.
However, with the housing crisis fading and the economy picking up steam, Kohlberg is betting on a bright future for Steinway at home and abroad, says Burt Flickinger III, president of retail consultancy Strategic Resource Group.
A typical Steinway grand piano costs around $50,000, but they can run much higher.
Kohlberg, which will take the company private, is opening a tender offer to buy all of Steinway's outstanding stock for $35 per share, a 15 percent premium to its Friday closing price of $30.43. Shares closed Monday at $35.28, up $4.85, or 16 percent.
The board of the Waltham, Mass., company unanimously recommended that shareholders tender their stock.
The deal includes a 45-day "go-shop" period in which Steinway may seek alternative bids.
Steinway & Sons was founded in 1853 by German immigrant Henry Engelhard Steinway in a loft on Manhattan's lower west side. Steinway was a master cabinetmaker who built his first piano in the kitchen of his Seesen, Germany, home, according to the company website.
Over the next 30 years, Steinway and his sons, C.F. Theodore, Charles, Henry Jr., William, and Albert, developed the modern piano. The company's products now include Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones, Ludwig snare drums, and Steinway & Sons pianos.
The buyout is expected to close in the third quarter.
Flickinger says that emerging markets such as China present a big opportunity for Steinway and Kohlberg. "Families will want their children to play on the best piano," Flickinger said of China, the world's second largest economy, where incomes are on the rise.