Briggs & Stratton Corporation has an agreement in place to acquire a Brazilian rival, Companhia Caetano Branco, for approximately $60 million dollars. Branco produces a range of outdoor power equipment, including generators, water pumps, and light construction equipment that are sold through its own network of more than 1,200 dealers across Brazil.
The sale will be subject to post-closing adjustments, but Briggs & Stratton indicated it expects to finalize the purchase within four months.
"This acquisition brings two great companies with incredible brand strength together,” stated Todd Teske, president and CEO of Briggs & Stratton. “It is also another step in executing our strategy to expand in developing regions of the world in order to expand our product portfolio in higher margin categories and to diversify our geographic footprint."
While Briggs & Stratton increases its footprint abroad, it has been adjusting its domestic production capacity in line with changes in demand. Its small engine production has been reassigned to operations in China, and two U.S. lawn mower plants have been consolidated. A plant in Alabama has been reorganized for a single product, V-twin engines for riding mowers.
Milwaukee-based Briggs & Stratton is the world's largest producer of gasoline engines for outdoor power equipment. Its Briggs & Stratton Power Products Group LLC subsidiary is North America's largest distributor of portable generators and pressure washers, and designs and manufactures standby generators and lawn-and-garden equipment.
Briggs & Stratton stated it would finance the transaction with available cash and/or existing credit facilities.
"This is a very positive outcome for Branco customers and Briggs & Stratton,” stated Denise Remor, Branco CEO. “The Branco business is a leading brand in Brazilian light power equipment with a very strong distribution network in Brazil. It's brand strength and current operational performance can only add to the strength of a company like Briggs & Stratton."
"We view this acquisition very positively for Briggs & Stratton and for all of the stakeholders in each entity – employees, customers and shareholders. With Branco's brand strength, employees and customer base, we will have an established, well performing company located in a country that has aggressive infrastructure needs and a history of higher growth opportunities, which can only add to the strength of our company," according to Teske.
