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Briggs & Stratton enters into sale agreement, reorganization under Chapter 11

July 20, 2020 -  By

Briggs & Stratton Corp. has entered into a stock and asset purchase agreement with KPS Capital Partners (KPS), a private equity firm. The Milwaukee Journal Sentinel reports KPS has agreed to buy all Briggs’ assets for approximately $550 million.

“Over the past several months, we have explored multiple options with our advisers to strengthen our financial position and flexibility,” said Todd Teske, Briggs & Stratton’s chairman, president and CEO. “The challenges we have faced during the COVID-19 pandemic have made reorganization the difficult but necessary and appropriate path forward to secure our business. It also gives us support to execute on our strategic plans to bring greater value to our customers and channel partners. Throughout this process, Briggs & Stratton products will continue to be produced, distributed, sold and fully backed by our dedicated team.”

According to the Journal Sentinel, Briggs & Stratton has more than half the engine market for residential outdoor power equipment with brands such as Ferris, Billy Goat, Simplicity, Snapper and Snapper Pro.

The Journal Sentinel reports that KPS also entered into an agreement in principle with the United Steelworkers of America for a new collective bargaining agreement for Briggs hourly employees represented by the union.

“KPS intends to grow the new Briggs & Stratton aggressively through strategic acquisitions. The new Briggs & Stratton will be conservatively capitalized and not encumbered by its predecessor’s significant liabilities,” Michael Psaros, co-managing partner of KPS, said in a statement to the Journal Sentinel.

Under the terms of the agreement, an affiliate of KPS formed for purposes of this transaction has agreed to acquire substantially all of Briggs & Stratton’s assets and assume certain liabilities. The affiliate would also act as the stalking-horse bidder through a court-supervised sale process. Among other things, the sale agreement is subject to higher or better bids from other potential purchasers.

To facilitate the sale process and address its debt obligations, Briggs & Stratton has filed petitions for a court-supervised voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code. It has also obtained $677.5 million in debtor-in-possession (DIP) financing, with $265 million committed by KPS and the remaining $412.5 from Briggs & Stratton’s existing group of ABL lenders. Following court approval, the DIP facility will ensure that Briggs & Stratton has sufficient liquidity to continue normal operations and to meet its financial obligations during the Chapter 11 process, including the timely payment of employee wages and health benefits, continued servicing of customer orders and shipments and other obligations.

Briggs & Stratton said this process will allow it to ensure the viability of its business while providing sufficient liquidity to fully support operations through the closing of the transaction. The company also says it believes this process will benefit its employees, customers, channel partners and suppliers, and best position it for long-term success. This filing does not include any of Briggs & Stratton’s international subsidiaries.

“We have a storied past and a bright future, built on our foundational expertise in applying power,” Teske said. “Our portfolio of innovative engines, robust lines of products and high-performance commercial batteries positions Briggs & Stratton to meet our global customers’ needs for power to get work done, now and in the future.”

 

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