A century-plus old company that specializes in gas engines has applied for bankruptcy protection. Based out of Wauwatosa, representatives of Briggs & Stratton Corp. disclosed the decision to file for bankruptcy stems from its recent financial struggles associated with the ongoing global health crisis.
Briggs & Stratton has entered into an agreement with KPS Capital Partners as part of the Chapter 11 filing for a sale of substantially all of its properties. The company has raised $677.5 million in so-called debtor-in-possession funding to finance operations in the sale and reorganization phase, the company said.
According to a statement, New York private equity firm KPS Capital Partners, whose portfolio includes TaylorMade golf clubs and Life Fitness gym equipment, has agreed to act as the lead bidder in a court-supervised auction with an offer of $550 million and is contributing to a bankruptcy loan which will keep Briggs & Stratton afloat. KPS announced a new deal has already been arranged with the United Steelworkers of America.
Briggs, the world's biggest manufacturer of gasoline engines for generators, lawnmowers, and outdoor maintenance equipment employs around 5,000 workers globally, including roughly 1,300 in the Milwaukee area. Years ago, the company had 11,000 staff in Wisconsin alone.
The company's bankruptcy petition listed between $1 billion and $10 billion in total liabilities. Its Chapter 11 filing does not include any of the group's international subsidiaries, the company disclosed. Briggs & Stratton was founded in Milwaukee in 1908 by inventor Stephen F. Briggs and investor Harold M. Stratton.
Briggs & Stratton said it has secured $677.5 million in DIP funding, with $265 million committed by KPS and $412.5 million from a group of creditors. The financing facility, after approval from the cour, will ensure it has enough operating expenses to finance its operations, like paying worker salaries and benefits and handling orders and shipments, during the Chapter 11 Process, Briggs stated.
A spokesperson for KPS said that banks including Bank of America, Wells Fargo, BMO Harris, and PNC Business Credit will provide exit funding for a new company created through the procurement of Briggs & Stratton's assets. KPS runs the KPS Special Situations Funds with over $11 billion in assets. The group stated that its portfolio of companies operates 150 manufacturing plants in 26 countries with around 23,000 workers.
The challenges that Briggs & Stratton has faced during the pandemic has made reorganization difficult but necessary as the group tries to secure its business, chief executive officer Todd Teske said in a statement.
