JAM Industries Buys KMC Music
...of Fender’s majority shareholders, TPG Growth Partners and Servco, to focus resources on Fender branded products. Late last year, Fender sold the KMC percussion brands to Drum Workshop. (More details on that transaction can be found on p. 26).
“We are extremely pleased to have found a company with ideal synergies for the KMC Music wholesale business in JAM Industries, Ltd.,” said Fender’s interim CEO and board member Scott Gilbertson. “We believe this transaction will mutually benefit each of our strategic objectives.”
KMC retail customers should notice little change at the leading distributor. Sales and administrative offices will remain in Bloomfield, Connecticut, and the existing call centers and staff in Illinois and California will be maintained. JAM Industries is in the process of expanding warehouse facilities on the East and West coasts to accommodate KMC inventory and order fulfillment.
The acquisition transforms JAM Industries into one of the leading players in the U.S. market. JAM also operates American Music & Sound, a distributor of high-tech and audio brands, including Allen & Heath consoles, Focusrite audio, and Kurzweil keyboards; U.S. Music, best known for its Washburn line of guitars; and Davitt & Hanser, a Cincinnati-based distributor. Martin Szpiro, JAM Industries CEO, stressed that KMC, U.S. Music, and Davitt & Hanser will operate independently with no changes to existing management. “We have great people and strategies in place,” he said. The three m.i. companies will be grouped under the JAM Industries U.S. Music Group banner, which will be headed by newly appointed CEO Mark Terry.
Szpiro noted that the KMC acquisition “adds greatly to the JAM family of companies in North America. KMC Music has a tremendous legacy and unique distribution abilities that will allow us to provide our current and expanded North American dealer base with the widest and best product offering anywhere.” Terry added, “The role of distribution is changing quickly and opening up great opportunities for companies with vision. The creation of JAM’s U.S. Music Group allows us to strategically bring together the strongest players in the U.S. m.i. distribution business in a way that will benefit both vendors and dealers.”
Terry brings over three decades of industry experience to his new post. He joined JBL professional directing export sales, was later named division president, and then served as president of the Harman Pro Audio Group. During his tenure at Harman Pro, he presided over a period of rapid growth, including the acquisition of AKG microphones and Crown power amplifiers. In 2008, he was appointed president of the AVC Group, a consumer electronics manufacturer. In 2013, he joined KMC Music as president.
KMC Music, formerly known as Kaman Music, was launched by Kaman Corporation founder Charles H. Kaman in 1966. For four decades, the operation was consistently profitable—however, for “Charlie” Kaman, it was also a labor of love. Growing up in Washington D.C. in the 1930s, young Kaman had two overriding passions: music and aeronautical engineering. He turned down a job offer to play guitar with the Tommy Dorsey Band, opting for engineering school instead. Upon graduating from Catholic University in 1940, he was recruited by Igor Sikorsky to help design the first helicopters. When he clashed with Sikorsky over design issues in 1945, he quit, raised $2,000, and built his first helicopter in his parents’ garage. Kaman Aerospace was launched.
Kaman’s business thrived in the 1950s as its K-225 turbine-powered helicopters set speed and altitude records and were embraced by the Navy for rescue missions. Company fortunes changed in 1961, when Kaman’s helicopter contracts with the Navy were abruptly cancelled as part of a military reorganization. Scrambling for new sources of revenue, Charlie Kaman turned to the guitar. The market was enjoying a period of rapid growth, fueled by the folk and rock and roll boom, and he was confident his engineering expertise would provide a competitive advantage. After a failed attempt to buy C.F. Martin, he decided to create a guitar from scratch. The result was the round back Ovation, introduced in 1966. Securing distribution for the revolutionary guitar proved difficult, so he began buying up music wholesalers. In 1968, he acquired Coast Wholesale, the leading distributor of music products west of the Rockies. Coast had been founded in 1890 as a division of retailer Sherman Clay. It was spun off as a separate operation in 1935. 1971 saw the acquisition of New York-based C. Bruno & Sons, then the largest distributor in the East. Founded in 1834, Bruno at one point distributed Martin Guitars. Coast and Bruno gave Kaman a national distribution network, which was gradually rebranded Kaman Music.
Kaman’s board of directors began exploring the sale of Kaman Music shortly after Charlie Kaman retired in 1999 because they felt that it was unrelated to core aerospace and industrial bearings business. In late 2007, Fender Musical Instruments acquired Kaman Music, renaming it KMC Music to avoid confusion with Kaman Corporation.
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