NEW YORK, July 20, 2020 /CNW/ -- KPS Capital Partners,
LP ("KPS") announced today that, through a newly formed affiliate,
it has entered into an asset purchase agreement with Briggs &
Stratton Corporation (NYSE: BGG) and certain of its wholly-owned
subsidiaries (collectively, "Briggs & Stratton" or the
"Company") under which KPS will acquire substantially all
of the assets of Briggs & Stratton, including equity of foreign
subsidiaries, for approximately $550
million.
Briggs & Stratton has filed a motion with the United States
Bankruptcy Court for the Eastern District of Missouri seeking the designation of KPS as the
stalking horse bidder in a sale motion as part of the Company's
filing of voluntary petitions under Chapter 11 of the Bankruptcy
Code today. Briggs & Stratton expects to sell its assets
through a court-supervised sale process under Section 363 of the
Bankruptcy Code.
KPS, through an affiliate, has also agreed to invest
$265 million in a FILO tranche of
Briggs & Stratton's Debtor in Possession ("DIP") financing to
support the Company's operations. Upon the entry of a final
order approving the DIP facility, KPS will have the right to
"credit bid" its $265 million
participation in the DIP financing in connection with the proposed
acquisition of Briggs & Stratton. Following court
approval, the DIP facility will ensure that Briggs & Stratton
has sufficient liquidity to continue normal operations and
continue to meet its financial obligations during the Chapter 11
process, including the timely payment of employee wages and
benefits, continued servicing of customer orders and shipments, and
other obligations.
KPS also announced that it has entered into an agreement in
principle with the United Steelworkers of America (the "USW") with
respect to a new collective bargaining agreement ("CBA") for Briggs
& Stratton hourly employees represented by the union at the
Company's manufacturing facilities in Wisconsin. The new CBA, an exclusive
agreement between KPS and the USW, will become effective upon
completion of the acquisition.
Further, Wells Fargo has agreed to continue to provide floorplan
financing to support Briggs & Stratton's customers under KPS'
ownership, and a syndicate of banks including Wells Fargo, Bank of
America, BMO Harris Bank and PNC Business Credit has committed to
provide exit financing to Briggs & Stratton. The
financings are subject to completion of the acquisition and
customary closing conditions.
Michael Psaros, Co-Founder and
Co-Managing Partner of KPS, said, "We are very excited to acquire
Briggs & Stratton, a legendary brand in American manufacturing
and the leading company in its industry. Briggs &
Stratton enjoys a leading market position, scale, a global
manufacturing footprint, world-class design and engineering
capabilities, and a portfolio of industry-leading products sold
under iconic brand names. We intend to capitalize on the
Company's many attractive growth opportunities and to support its
already substantial investment in research and development,
technology and new product development. KPS intends to grow the new
Briggs & Stratton aggressively through strategic
acquisitions.
"KPS is committed to the expeditious acquisition of Briggs &
Stratton to provide certainty of outcome and confidence in the new
Company's future for all of its stakeholders, including customers,
employees and suppliers. The Company and its stakeholders
will benefit from KPS' demonstrated commitment to manufacturing
excellence, continuous improvement, global network, access to
capital and significant financial resources. The new Briggs
& Stratton will be conservatively capitalized and not
encumbered by its predecessor's significant liabilities.
"We thank the United Steelworkers of America for its support of
our acquisition of the Company. "We have expended an enormous
amount of effort, resources and capital on this process to
date. We are confident that all of the conditions necessary to
create a new thriving going concern enterprise are in place," Mr.
Psaros concluded.
Kirkland & Ellis LLP is acting as legal counsel to KPS with
respect to the transaction.
About Briggs & Stratton Corporation
Briggs &
Stratton Corporation (NYSE: BGG), headquartered
in Milwaukee, Wisconsin, is
focused on providing power to get work done and make people's lives
better. Briggs & Stratton is the world's largest
producer of gasoline engines for outdoor power equipment, and is a
leading designer, manufacturer and marketer of power generation,
pressure washer, lawn and garden, turf care and job site products
through its Briggs & Stratton®,
Simplicity®, Snapper®, Ferris®,
Vanguard®, Allmand®, Billy
Goat®, Murray®,
Branco® and Victa® brands.
Briggs & Stratton products are designed, manufactured,
marketed and serviced in over 100 countries on six continents. For
additional information, please visit www.basco.com and
www.briggsandstratton.com.
About KPS Capital Partners
KPS, through its affiliated
management entities, is the manager of the KPS Special Situations
Funds, a family of investment funds with over $11.4 billion of assets under management (as of
March 31, 2020). For over two
decades, the Partners of KPS have worked exclusively to realize
significant capital appreciation by making controlling equity
investments in manufacturing and industrial companies across a
diverse array of industries, including basic materials, branded
consumer, healthcare and luxury products, automotive parts, capital
equipment and general manufacturing. KPS creates value for
its investors by working constructively with talented management
teams to make businesses better, and generates investment returns
by structurally improving the strategic position, competitiveness
and profitability of its portfolio companies, rather than primarily
relying on financial leverage. The KPS Funds' portfolio companies
have aggregate annual revenues of approximately $8.4 billion, operate 150 manufacturing
facilities in 26 countries, and have approximately 23,000
employees, directly and through joint ventures worldwide. The KPS
investment strategy and portfolio companies are described in detail
at www.kpsfund.com.
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SOURCE KPS Capital Partners, LP