Hal Leonard sells off major equity slice

Seidler Equity Partners, a private investment firm, has acquired a majority interest in Hal Leonard.

Wanting to insure the long-term financial growth of Hal Leonard, CEO Keith Mardak and his wife Mary Vandenberg, a former Hal Leonard Vice President and current shareholder, started looking at outside investors. Although there will be a change in the ownership structure of the company, the management will stay the same with senior management retaining minority ownership and signing multi-year contracts, including Mardak who will remain chairman and CEO.

“I joined Hal Leonard in 1970,” said Mardak in a letter to employees, “and acquired the company in 1985, along with some managers as minority partners. We’ve had tremendous growth since the time I started, but I think the best years are still ahead of us. Mary and I decided we needed to do some estate planning. That, along with wanting to insure the company’s financial strength for future growth, are what have spurred on bringing in outside investors who will now have a majority position in the company. Seidler Equity Partners are an absolutely great group of people.” When Mardak joined the company in 1970, Hal Leonard had sales of less than $1 million. Today the company has annual sales of over $173 million.

Mardak and the management team made the agreement with Seidler Equity Partners, a  Los Angeles-based private equity investor, after vetting many other companies. They cited Seidler’s focus on helping Hal Leonard with growth and acquisitions as an important factor in the decision. “They’re not flippers, they’re holders,” Mardak said. “We’ve had many opportunities to expand but have been reluctant to take on debt. Bringing in Seidler removes that obstacle and will help us accelerate our expansion opportunities.”

Hal Leonard president Larry Morton added, “We’re excited about what Seidler brings to our board of directors. Their partnership model will help us expand our global reach and digital delivery platforms while recognizing that the success of Hal Leonard has been built by a cohesive team of incredibly talented and dedicated employees. Seidler really understands the value and importance of our people. That along with their enthusiasm for our industry should be a great fit to take us to even greater heights.”

Hal Leonard got its start in the 1930s in Winona, Minnesota. Two brothers, Harold (Hal) and Everett (Leonard) Edstrom and friend Roger Busdicker formed the Hal Leonard Orchestra, a dance band, and toured the United States. The orchestra was even featured on the cover of a 1941 edition of Billboard magazine. After World War II the band broke up but the friends found new success by arranging the popular songs of the day as school band directors. Soon other bands started requesting their arrangements and, after doing some research on the world of publishing and copyright law, they founded Hal Leonard in 1947.

In 1970, Mardak and associates started a new division of Hal Leonard called Learning Unlimited, to create the first book/audio music instructional products. This division soon outgrew the company, and Mardak became general manager for the entire company. In 1985, Hal Leonard was purchased from the original founders by an internal management team led by Mardak, who then became president. Since then, it has experienced consistent, dramatic growth due to creative, innovative and aggressive publishing and marketing. Today, Hal Leonard Corporation is the world’s largest educational music publisher, with the #1 methods for learning guitar (the Hal Leonard Guitar Method), piano (the Faber Piano Method), and school music instruments (Essential Elements for Band and Strings), plus publications for learning virtually every instrument imaginable.

In its catalogue of more than 200,000 titles, Hal Leonard represents many of the world’s best known and most respected publishers, artists, songwriters, arrangers and musical instrument manufacturers. They are the leading publisher of songbooks and sheet music of top catalogs featuring the music of Disney, the Beatles, Adele, Taylor Swift, Andrew Lloyd Webber, Elvis Presley, John Williams, and thousands more; band, orchestra and choral arrangements for schools; music reference publications; children’s music products; educational magazines; and more. The company leads the way in technology, developing eBooks, digital sheet music, apps and more. Hal Leonard operates many popular websites including SheetMusicDirect.com with thousands of songs arranged for different instruments available for download, and GuitarInstructor.com for online guitar lessons and tab. In 2014, Hal Leonard made a substantial investment in Noteflight.com, an innovative music technology company dedicated to reinventing the way people create, share and use digital sheet music. This online community has grown to over two million registered educational and private users since the acquisition.

Hal Leonard has also become a major distributor of music gear, recording equipment, accessories and music gift items to the music industry. Its products are sold in more than 80 countries throughout the world through Hal Leonard offices and a large network of distributors. Domestically, the company markets to more than 7,500 music stores in the United States and Canada through a team of 50 in-house sales representatives.

The firm operates out of two main facilities — its corporate headquarters in Milwaukee, Wisconsin, and a state-of-the-art administration, production and distribution facility in Winona, Minnesota. The company also has offices in New Jersey and Boston as well as abroad in Australia, Belgium, Germany, Holland, Italy, and the United Kingdom and employs a total of nearly 500 people.