KPS Capital Partners has closed its buy of small engine manufacturer Briggs & Stratton, including the equity of foreign subsidiaries, for approximately $550 million.
On July 20th, Briggs & Stratton voluntarily filed for Chapter 11 bankruptcy protection to allow the company and its creditors to work out a reorganization plan. At that time, KPS was named as the company’s stalking horse bidder. On September 15th, the U.S. Bankruptcy Court for the Eastern District of Missouri approved the sale to KPS, and the acquisition closed on September 22nd.
Briggs & Stratton is the world’s largest producer of gasoline engines for outdoor power equipment used for power generation, pressure washing, lawn and garden, and turf care.
Company-owned brands include Briggs & Stratton, Simplicity, Snapper, Ferris, Vanguard, Allmand, Billy Goat, Murray, Branco and Victa.
For the trailing twelve months, Briggs & Stratton had revenues of $1.7 billion, gross profit of $242 million (14% GPM), and a negative EBITDA of $68 million. For the fiscal year ending June 30, 2017, the company had revenues of $1.8 billion, gross profit of $383 (GPM 21%), and EBITDA of $156 million (8.7% EBITDA margin).
Briggs & Stratton was founded in Milwaukee in 1908 and at one point was the world’s largest manufacturer of small gasoline engines. Over the past 112 years, it has produced more than 125 million engines.
Briggs & Stratton will now operate as an independent company led by Steve Andrews as president and CEO. KPS and Mr. Andrews partnered in September 2011 to form International Equipment Solutions (IES), a maker of attachment tools and cab enclosures for operator driven heavy equipment. Through a series of transactions with multiple buyers, KPS fully exited its investment in IES in November 2019.
“KPS is delighted that Steve Andrews will serve as president and CEO of Briggs & Stratton,” said Michael Psaros, co-founder and co-managing partner of KPS. “Steve is an outstanding leader with a demonstrated track record of transforming and growing companies. We have worked successfully with Steve in the past and look forward to collaborating again as the new Briggs & Stratton.”
“This is the beginning of a new era for Briggs & Stratton, a legendary brand in American manufacturing and the leading company in its industry,” added Mr. Psaros. “The company has a new owner, a new CEO, a new board of directors and a renewed focus. Briggs & Stratton launches with a portfolio of industry-leading products sold under iconic brand names, a rock-solid capital structure and access to KPS’ financial resources and expertise. We look forward to accelerating the company’s growth by increasing its already substantial investment in research and development, technology, and new product development. KPS will also provide the capital for Briggs & Stratton to pursue strategic acquisitions.
KPS makes control investments in manufacturing and industrial companies across a range of industries, including basic materials, branded consumer, healthcare, automotive parts, capital equipment, and general manufacturing. Many of KPS’s investments involve creating new companies to buy underperforming or distressed assets, companies operating in bankruptcy or in default of obligations to creditors, or with a history of recurring operating losses. KPS is headquartered in New York City with additional offices in Frankfurt and Amsterdam.
In October 2019, after just four weeks of fundraising, KPS held a first, final, hard cap and oversubscribed closing of KPS Special Situations Fund V LP and KPS Mid-Cap Fund LP. KPS Fund V had a $5 billion target and a $6 billion hard cap, and KPS Mid-Cap had a $750 million target and a $1 billion hard cap.
In June 2020, KPS acquired the Lufkin rod lift business from publicly traded Baker Hughes. Lufkin’s rod lift products, technologies, and services are used in the energy sector to pump oil and gas to the surface using artificial pressure; and in July 2020 KPS acquired AM General, a military vehicle and contract automotive manufacturer, from MacAndrews & Forbes, an investment firm controlled by Ronald Perelman.
“We are grateful to all of the Briggs & Stratton’s stakeholders for their assistance and cooperation throughout the bankruptcy process. We thank the United Steelworkers for its very public support of our acquisition of the company,” concluded Mr. Psaros.
Private Equity Professional | September 23, 2020