Briggs & Stratton Corp., Milwaukee, has filed for Chapter 11 bankruptcy as a result of the challenges it has faced during the coronavirus (COVID-19) pandemic. The company recently entered into a definitive stock and asset purchase agreement with KPS Capital Partners, LP (KPS).
Under the terms of the agreement, an affiliate of KPS formed for purposes of this transaction has agreed to acquire substantially all of the Briggs & Stratton’s assets and assume certain customer, employee and vendor liabilities, and it would act as the stalking-horse bidder through a court-supervised sale process known as a Section 363 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, the Briggs & Stratton has filed petitions for a court-supervised voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code. The company also has obtained $677.5 million in DIP financing, with $265 million committed by KPS and the remaining $412.5 from the Briggs & Stratton’s existing group of ABL lenders. Following court approval, the DIP facility will ensure that the company 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.
This process will allow the Briggs & Stratton to ensure the viability of its business while providing sufficient liquidity to fully support operations through the closing of the transaction. The company believes this process will benefit its employees, customers, channel partners and suppliers, and best positions the company for long-term success. This filing does not include any of Briggs & Stratton’s international subsidiaries.
“Over the past several months, we have explored multiple options with our advisors to strengthen our financial position and flexibility. The challenges we have faced during the COVID-19 pandemic have made reorganization difficult but a necessary and appropriate path forward to secure our business,” said Todd Teske, chairman, president and CEO, Briggs & Stratton.
"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,” he said.
“We have a storied past and a bright future, built on our foundational expertise in applying power. 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,” Teske said.
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