Boosey & Hawkes buys Rico for pounds 17.9m

British music publisher and instrument specialist purchases Californian reed-maker
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Boosey & Hawkes, the music publisher and instrument manufacturer, took an important step into the world's biggest music market with the pounds 17.9m acquisition yesterday of Rico, a Californian clarinet and saxophone reed maker.

The deal sent Boosey's shares 53p higher to 718p, capping a dramatic rise in the company's shares over the past five years. Worth just 131p in 1991, the shares have outperformed the market by a huge margin as investors woke up to the attractions of a unique investment.

Boosey owns one of the best catalogues of modern classical music copyrights including such 20th-century giants as Bartok, Britten, Prokofiev, Shostakovich and Strauss and recently received a big boost when copyright laws were changed to bring Britain in line with the rest of Europe. Extending copyright from 50 years to 70 meant that Elgar, Delius and Rachmaninov were all brought back to copyright life.

Richard Holland, chief executive, said the Rico deal was an ideal fit. "It represents an excellent opportunity for us to expand our musical instruments division. Our significant international strength should help Rico's sales outside the United States and Rico's strong position in North America will create further opportunities for the group."

Boosey earns substantial fees from performances of its pieces at musical venues such as the Covent Garden opera and South Bank Centre quite apart from recording rights and sheet music sales.

But Mr Holland has devoted equal efforts to building up Boosey's traditional instrument-making division where it has strong positions in brass and string instruments. Key to the success of that division has been increasing the group's share of the enormous American market and tapping into the growing aspirations of the Asian middle classes to give their children Western music.

The cash deal is expected to be earnings enhancing from the outset even without assuming the benefits Boosey hopes to gain from pushing its existing instrument portfolio through Rico's North American distribution chain and Rico's reeds to its own customers.

Rico, based in Sun Valley, California believes it has a significant advantage over its competitors through its control of cane plantations in France, Argentina and California. It also controls cane harvests in Spain, allowing it to limit supply problems and ensure it has only top quality cane for its reeds.