In its recent second quarter conference call with financial analysts, Briggs & Stratton revealed that as part of an ongoing analysis of its business and markets, it would sell “certain assets” within its broad portfolio.
Briggs & Stratton Chairman, President and CEO Todd Teske said that decision was the result of a project first announced last August in which the company, with the assistance of an outside advisor, sought to more fully analyze market dynamics to position the business for more sustained growth and higher financial returns.
While identifying power technologies – both engines and the company’s new commercial battery technology – as the core of its business, Teske said the study also “evaluated the breadth of our offerings in related markets.
“We’ve had success building products, brands and markets, particularly in commercial applications,” Teske said. “Our success, however, has also created complexity that can at times limit our ability to compete effectively and develop certain attractive long-term opportunities. Accordingly, simplification and focus are necessary to properly execute on the significant opportunities we see in the foreseeable future.
“These key elements led to an action plan that we will be finalizing over the next few weeks. The plan will include streamlining our portfolio to create a sharp focus on our core competency of power application. It will result in certain assets sales to enable the sharper focus to take place as well as play a meaningful part in rebuilding our financial flexibility.”
The company gave no indication as to what assets might be sold.
For much of its 112-year history, the Briggs & Stratton manufactured vertical and horizontal shaft gasoline engines used primarily in consumer lawn & garden and home-related applications. Beginning in 2000, the company began to broaden its scope, first by buying Generac Portable Products Systems, which brought portable generators, pressure washers, pumps and other home products. Four years later, Briggs & Stratton acquired Simplicity Manufacturing, which builds range of commercial and consumer products including mowers, leaf blower/vacuums, and other small equipment sold under the Ferris, Snapper, Snapper-Pro and Giant-Vac brands.
In 2012, the company acquired Brazil’s Branco, a supplier of a broad range of outdoor power equipment used primarily in light commercial applications. Two years later, it purchased Allmand Brothers, a a specialist in towable light towers, industrial heaters and solar LED arrow boards. Finally, in 2015, Briggs & Stratton acquired Billy Goat Industries, a manufacturer of specialty turf equipment such as aerators, sod cutters, brush cutters, blowers, lawn vacuums and debris loaders.
While expanding its portfolio, the company maintained its position as one of the world’s leading suppliers of small consumer and commercial gasoline engines. Most recently, it augmented its power application options by introducing a range of commercial lithium-ion batteries (see October 2019 Diesel Progress).
Teske said the company is “actively working with investment bankers to assist with the sale of assets.
“Streamlining our portfolio and focusing on power application will enable us to better balance our cost structure, improve resource allocation, and to fund new growth opportunities.”
Briggs & Stratton Senior Vice President and Chief Financial Officer Mark Schwertfeger also told the analysts that the asset sales could also be used to retire some $195 million in senior financial notes that will mature at year’s end. “We believe that the assets sales could be sufficient to address the upcoming maturity,” he said. “However, we will not solely rely on that.”
Briggs & Stratton said it was entering a planning period to finalize steps in its repositioning plan and the results will be announced in approximately four to six weeks.