Briggs & Stratton files chapter 11 bankruptcy

[kscarbel2]

Bloomberg  /  July 20, 2020

Another icon of post-war American suburbia went bust as Briggs & Stratton Corp. declared bankruptcy, felled by weak sales, too much debt and a final push over the edge from the coronavirus pandemic.

The world’s biggest maker of gasoline engines for outdoor power equipment sought protection from creditors in a St. Louis bankruptcy court on Monday, citing debts of more than $1 billion.

The filing included a $550 million bid for the company from KPS Capital Partners, a New York private equity firm, which promised to keep Briggs & Stratton in business without the crushing debt that plagued the century-old company.

KPS, whose portfolio includes TaylorMade golf clubs and Life Fitness gym equipment, specializes in manufacturing companies. It agreed to serve as the lead bidder in a court-supervised auction, setting a minimum price for any eventual sale, and it’s contributing to a bankruptcy loan that will keep Briggs & Stratton operating, according to a statement. KPS said it has already negotiated a new contract with the United Steelworkers of America.

If you’ve ever pushed or driven a lawn mower in your backyard or wielded a snow-blower, chances are the engine was made by Briggs & Stratton, which supplied brands such as Craftsman and Snapper.

If you hired a lawn service instead, some of its equipment probably had Briggs & Stratton components, too; it sold products to Deere & Co., MTD Products Inc. and Husqvarna Outdoor Products Group. The Wisconsin-based company’s product lineup also includes power generators and pressure washers, made by 5,200 employees as of the end of last year. It employed more than 9,000 in 2005.

The company has been pressured by falling sales, tied in part to the pricing power of mass merchandisers such as Home Depot, Lowe’s and Walmart, according to regulatory filings. It didn’t help that Sears Holdings Corp., which accounted for a large chunk of sales, went bankrupt in 2018. Briggs & Stratton said it also faces competition from big rivals such as Honda and Kawasaki.

On top of that, Briggs & Stratton’s news release about the bankruptcy cited pressures from the Covid-19 pandemic, which “have made reorganization the difficult but necessary and appropriate path forward to secure our business.”

The company, led since 2010 by Chief Executive Officer Todd Teske, is headed for a third straight annual loss, and the stock -- which topped $40 in 2004 -- has been selling for less than 80 cents.

Trading was halted Monday while the news was disseminated, but at $550 million, KPS’s offer wouldn’t be enough to cover all the outstanding obligations, which means that shareholders could be wiped out. The company’s junior bonds would have to be paid off before stockholders get anything, and those notes were quoted recently at about 10 cents on the dollar -- a sign that full repayment is unlikely.

Acquisitions Planned

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

The offer by KPS would need court approval and could still be topped by a rival bidder for the company, whose headquarters is in Wauwatosa, less than 10 miles from downtown Milwaukee.

Briggs & Stratton said in its statement that it lined up $677.5 million of debtor-in-possession financing that will help fund operations during the court reorganization. KPS said it’s contributing $265 million of that sum, and lenders including Wells Fargo & Co., Bank of America Corp., BMO Harris Bank and PNC Business Credit will provide exit financing.

Briggs & Stratton began as an informal partnership in 1908, initially focused on auto parts under founders Stephen F. Briggs and Harold M. Stratton, according to the company’s website. (“Briggs was the inventor and Stratton was the investor,” the company said.) They ventured into areas such as engine-powered bicycles, electric refrigerators and coin-operated paper towel dispensing machines, and their company blossomed alongside American suburbs dotted with single-family homes and grass-covered yards.

Global Reach

KPS, based in New York, runs the KPS Special Situations Funds with more than $11.4 billion of assets. The firm said its portfolio companies run 150 manufacturing facilities in 26 countries with about 23,000 employees.

Kirkland & Ellis is legal counsel for KPS. Briggs & Stratton previously hired Houlihan Lokey Inc. to advise it on strategic options including refinancing its debt, selling assets and cutting costs.

The case is Briggs & Stratton Corporation, 20-43597, U.S. Bankruptcy Court, Eastern District of Missouri (St. Louis).

[kscarbel2]

I've been expecting this.

[mrsmackpaul]

Sadly I  am expecting a lot of other companies to follow suit in the next 12 months 

Paul 

[Ditchdiggerjcf]

Sad.

[Ditchdiggerjcf]

4 hours ago, mrsmackpaul said:

Sadly I  am expecting a lot of other companies to follow suit in the next 12 months 

Paul 

Going to get worse with the mask requiring retards in charge.

[david wild]

union company ??? how much of debt is pension related

[Hayseed]

With the exception of the "Vanguard" range that are built in Japan by a Joint Venture. The rest of the Briggs & Sh#tten range are throw away rubbish.. !! ( IMHO)

 

Honda & Kohler produce a far superior Product, (Again in My Opinion.

 

As a footnote, 10-15 yrs ago they bought Aussie Icon Victa lawnmowers...Production of Victa's own Motor ceased & they are now Fitted with Chinese built B & S Engines

Quality & reputation has suffered BIgtime..

[david wild]

No doubt the Honda is the way to go,wouldn't buy any thing with a B&S because you know it will die way to soon.

[Ditchdiggerjcf]

I believe it is safe to say that briggs problems were self created.

[Red Horse]

1 hour ago, david wild said:

No doubt the Honda is the way to go,wouldn't buy any thing with a B&S because you know it will die way to soon.

Hate to say it but when I was a kid, B & S was the good one-I  remember "Clinton"-junk.  today I have 4 Hondas.  Including one on a 2300 PSI pressure washer that must be 20 plus years old- my oldest was a "college pro" painter when he was in school- talk  about hours and abuse.!

But hope they can make a comeback.

[PC68]

On 7/20/2020 at 9:08 PM, Hayseed said:

On 7/20/2020 at 9:08 PM, Hayseed said:

 

With the exception of the "Vanguard" range that are built in Japan by a Joint Venture. The rest of the Briggs & Sh#tten range are throw away rubbish.. !! ( IMHO)

 

Honda & Kohler produce a far superior Product, (Again in My Opinion

 

  I’m still running mostly Honda & Kohler but just purchased a new 37      horsepower Vanguard. I’m happy with the performance so far. 

[mowerman]

wow thats like really wierd,,,,,first i heard of it,,,,been using them for years,,,,,first preference of coarse....everyone,has issues with different products....i always thought tecumsuh and clinten....were second fiddle....bob

[mowerman]

I’m sure most of it is a Ford Chevy thing... lol bob

[kscarbel2]

The genuine Honda engines have come down in price over the years to become very competitive. And the Honda-copy engines from China have very high quality. And then there's Kawasaki used by Deere and others.

Briggs failed to evolve with a changing environment and remain competitive, much less a leader. It's a shame, as they had brand recognition.

I lost all faith in the company when they told customers to stop changing oil......................https://www.briggsandstratton.com/na/en_us/innovations/push-mowers/just-check-and-add-technology.html

[1965]

I imagine most people rely on the low oil switch to let them know when they need to finance for a new 1. At least they were trying to get you to check the oil. Nowadays it’s amazing that people can put gas in there vehicles. I hear pretty regular of people putting def in there fuel tanks and vise versa.

[mowerman]

Yes changing the oil and any of them is the best thing you can do they pretty much all last a long time that way..Oh pretty much agree with Honda for powered generators there a lot quieter.. bob

[j hancock]

I've had pretty good luck with all of them.  BS, Tecumseh, Ottawa, Honda, Kohler, Stihl, Husqvarna.

[davehummell]

My boss had a john deere lawn mower tractor and it had a pressure fed oil system Kawasaki engine it ran for years cutting a large lawn never used a drop of oil. Way better then it had to be for the mower was not that expensive. I have husky blower, chainsaw, pole saw they are over ten years old the saw is a pro model and it cut a lot of hard wood. But I have the pro model stihl climber saw that is just a rip roaring little saw that thinks it's twice as big as it is.

[kscarbel2]

58 minutes ago, davehummell said:

My boss had a john deere lawn mower tractor and it had a pressure fed oil system Kawasaki engine it ran for years cutting a large lawn never used a drop of oil. Way better then it had to be for the mower was not that expensive. I have husky blower, chainsaw, pole saw they are over ten years old the saw is a pro model and it cut a lot of hard wood. But I have the pro model stihl climber saw that is just a rip roaring little saw that thinks it's twice as big as it is.

The Kawasaki FH721V used on Deere X500's over the 2006-2015 period, for example. They never wear out if you maintain them properly.

And now you can get the X590 with electronic fuel injection (EFI) equipped Kawasaki FS730 engine. No choke, it starts like a car.

[Hayseed]

On 7/27/2020 at 5:43 AM, kscarbel2 said:

And the Honda-copy engines from China have very high quality.

Those Chonda's are almost as good as the real thing...!!

[Truck Shop]

           Remember Wisconsin-the V4D-V65D IIRC were pretty rugged engines.

[1958 F.W.D.]

When I was 11, I completely rebuilt a B & S horizontal shaft engine. I wrote a letter to B & S Customer Service asking for a B & S Decal for the shroud (had to scrape off the old one to re-paint it.) I explained I was 11 and did not know who to address the letter to. I also explained that I would gladly pay for the decal if there was a cost, and also told them I was a big fan of their product.

About 3 weeks later I get home from school and there is a big package waiting for me. It contained a letter from (I think it was Frederick Stratton, CEO at the time) thanking me for my interest in B & S. The box also contained a service manual, decals, a B & S jacket and a ball cap. I wish I still had that letter. 

[mowerman]

Excellent story that’s pretty much what i think about the company to this day been interested in them since I was 10 and my pop used to mow with one I think a lot of people lost interest in them when they came out with the automatic choke it really didn’t work worth a shit ... but nice try lol...  I have still been using them for years I have a lot of them ...bob

[mrsmackpaul]

On 7/28/2020 at 10:37 AM, davehummell said:

My boss had a john deere lawn mower tractor and it had a pressure fed oil system Kawasaki engine it ran for years cutting a large lawn never used a drop of oil. Way better then it had to be for the mower was not that expensive. I have husky blower, chainsaw, pole saw they are over ten years old the saw is a pro model and it cut a lot of hard wood. But I have the pro model stihl climber saw that is just a rip roaring little saw that thinks it's twice as big as it is.

Princess had a John Deere ride on with rhe Kwacka (Kawasaki to none Australian parts of the world) and it 26 years old and out lasted the mower by a long way 

I had to put a coil on it and new brushes in the starter motor, a incredible little motor and cut well over a acre of lawn ever week or so for all of those years

Paul

[james j neiweem]

Techumsa -Wisconsin and now BS🤥