By Hannah Lester
Briggs and Stratton announced Monday in a press release that it has filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
“Over the past several months, we have explored multiple options with our advisors to strengthen our financial position and flexibility,” said Todd Teske, Briggs & Stratton’s chairman, president and chief executive officer. “The challenges we have faced during the COVID-19 pandemic have made reorganization the difficult but necessary and appropriate path forward to secure our business. 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.”
Briggs and Stratton owns a plant in Auburn, located in the Auburn Technology Park.
The company will be entering into a stock and asset purchase with KPS Capital Partners, LP which prompted the reorganization.
“Under the terms of the agreement, an affiliate of KPS formed for purposes of this transaction has agreed to acquire substantially all of [Briggs and 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,” the release said.
The company also received over $677 million in DIP financing. $265 million was provided by KPS, while just over $412 million was provided by the companies’ 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,” the release said.
The release said that deal with KPS will likely promote long-term success for the company.
“We have a storied past and a bright future, built on our foundational expertise in applying power,” Teske said. “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.”