Briggs & Stratton is free of its Chapter 11 bankruptcy proceeding as the sale to KPS Capital Partners is signed off for a cool us$550 million.
The deal includes all the assets of Briggs & Stratton Corp – minus the nearly $1 billion debt it had raked up – and also includes all its subsidiaries including the Simplicity, Snapper, Ferris, Vanguard, Allmand, Billy Goat, Murray, Branco, and Victa brands.
Briggs & Stratton is now free to trade on, independent of any previous unpaid debts, with the full backing of global private equity investor KPS.
It will be business as usual for Briggs & Stratton to continue as one of the world’s largest producers of petrol engines for outdoor power equipment.
And it is understood the company will continue to design, manufacture and market commercial lithium-ion batteries, power generation, pressure washer, lawn and garden, turf care and job site products.
It was a very lucky timing for the previous board when on 15 June, 2020 they gave approval to delay a $6.7 million interest payment, but voted to give executives and other key employees more than $5 million in cash retention bonuses.
The cash bonuses for key executive officers and employees included $1.2 million for Todd Teske, chairman, president and CEO; $600,000 for Mark Schwertfeger, senior vice president and chief financial officer; $425,000 for David Rodgers, senior vice president and president of the engines and power division; and $425,000 for Harold Redman, senior vice president and president of the turf and consumer products division.
This followed the March quarter filing where the company reported a loss of us$145 million compared with an $8 million profit for the same quarter a year previous. At 31 December 2019 the company position was net debt of $581 million and S&P Global Ratings slated the company at an “increasing likelihood” of a default or restructuring.
Looking back at the past ten years when Todd Teske became CEO following the retirement of John Shiely, the company’s revenue peaked at $2.1 billion in 2011 and 2012 but then wilted down to a range of between $1.79 and $1.88 billion for the next seven years.
During this time period the company posted net losses in 2013, 2018 and 2019 with only minor profits the other years.
Briggs & Stratton’s stockholders witnessed a 10-year peak in January 2018 at us$27 a share but then saw a downward slide until the company filed for Chapter 11 bankruptcy on 20 July, 2020 when the share price dipped under us$1 in its final days.
Now the restructure has arrived, albeit at the expense of creditors and shareholders, and all that will be put aside.
Effective 22 September, Steve Andrews was named president and chief executive officer of Briggs & Stratton, with former chairman, president and CEO Todd Teske stepping away from the company.
Andrews already has a feather in his cap working with KPS, in 2011 they created International Equipment Solutions (IES) and through a series of acquisitions they transformed two non-core divisions into a thriving, highly profitable company.
IES went on to become a leading manufacturer of attachment tools, operator cabs and other products for off-highway applications.
This time around the job doesn’t seem as daunting.
Briggs & Stratton is already a legendary brand and now has strong financial backing from a new owner, there is a new CEO, a new board of directors and a renewed focus with a portfolio of industry-leading products sold under iconic brand names.
If there wasn’t a trail of unpaid debt in the mix, it would be a remarkable resurrection.