Briggs & Stratton Corporation, the company behind the well-known small engine brand, has filed for Chapter 11 bankruptcy in the U.S., but it appears the brand will survive.
The Wisconsin-based engine manufacturer reported debt exceeding $1 billion in a St. Louis bankruptcy court on Monday. Coinciding with the filing, Briggs & Stratton announced a stock and asset purchase agreement worth $550 million with KPS Capital Partners, a New York private equity firm that also owns the TaylorMade golf brand and Life Fitness gym equipment.
“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,” says Todd Teske, Briggs & Stratton’s chairman, president, and Chief Executive Officer.
To stay afloat during the bankruptcy process, the company has obtained $677.5 million in “debtor-in-possession” financing, with $265 million committed by KPS and the remaining $412.5 from existing bank lenders.
“Throughout this process, Briggs & Stratton products will continue to be produced, distributed, sold, and fully backed by our dedicated team,” continues Teske.
Briggs & Stratton must still go through the Chapter 11 court process, which will allow for bids from other potential suitors, but KPS says it has already negotiated a new contract with the United Steelworkers union, which represents hundreds of the engine maker’s employees.