Briggs & Stratton sale approved
A bankruptcy court judge approved the sale of Briggs & Stratton Corp. to KPS Capital Partners.
A bankruptcy court judge has approved the sale of Briggs & Stratton Corp. to KPS Capital Partners, a New York private equity firm.
The sale’s closing is expected to occur sometime within the next 10 days.
Founded in Milwaukee in 1908, Briggs & Stratton filed for protection from creditors in U.S. Bankruptcy Court on July 20.
Wauwatosa-based Briggs filed the Chapter 11 proceeding in U.S. Bankruptcy Court for the Eastern District of Missouri. Under Chapter 11, a company and its creditors work out a reorganization plan that enables the business to continue operating.
As a condition of the sale, Briggs & Stratton’s pension plan will be taken over by the Pension Benefit Guaranty Corp., a federal government agency.
Briggs, one of the world’s largest manufacturers of small gasoline engines, employs about 5,000 people worldwide including around 1,300 in the Milwaukee area. Years ago, the company had 11,000 employees just in Wisconsin.
As part of the bankruptcy, KPS Capital Partners agreed to to purchase all of Briggs’ assets for approximately $550 million.
Known as a stalking horse bid, the agreement set a minimum price for the sale.
The offer was subject to court approval and also depended on whether any higher bids were received for the company. There were no other bids, according to court documents.
The court approval also provides for a relatively quick closing of the sale.
“Time is of the essence in consummating the sale transaction,” according to the documents. “To maximize the value of the purchased assets, preserve the viability of the business as a going concern, and maximize recoveries to creditors, it is essential that the sale of the purchased assets occur as soon as reasonably practicable.”
The order was signed by U.S. Bankruptcy Judge Barry S. Schermer.
$5 million in bonuses as company was losing money
Briggs was losing money and burdened by large debts when the economic downturn caused by coronavirus hit. Its sales fell by $107 million, or 18%, to $474 million in its third quarter ended March 29, compared with the same period a year earlier.
The company warned that its losses, the pandemic and pending debt payments raised substantial doubt about its ability to continue as a going concern.
Yet in June, while it skipped a $6.7 million interest payment, the company awarded its executives and other key employees more than $5 million in cash retention awards.
Such awards are often given before a company files for bankruptcy.
Briggs makes small engines, residential and commercial lawn and garden equipment, portable generators, pressure washers, snow throwers and other outdoor power equipment. The company’s products are sold in more than 100 countries. under such brands as Briggs & Stratton, Victa, Simplicity, Ferris, Billy Goat, Vanguard, Branco and Allmand. It also sells engines to other manufacturers, including Deere & Co., Toro Co. and Viking.