Briggs & Stratton Corporation (NYSE:BGG) today announced that it has signed a definitive agreement to acquire Companhia Caetano Branco, of Brazil ("Branco") for approximately $60 million dollars, subject to post-closing adjustments. Founded in 1936, Branco is a leading brand in the Brazilian light power equipment market with a broad range of outdoor power equipment used primarily in light commercial applications in Brazil. Its products including generators, water pumps, and light construction equipment are sold through its independent network of over 1200 dealers throughout Brazil. Branco employs approximately 150 people in Brazil.
Briggs & Stratton anticipates financing the transaction from cash on hand and/or its existing credit facilities. Branco has annual sales of approximately $40 million with operating margins ranging from approximately 13% to 17% across its various product lines. Completion of the transaction is subject to conditions customarily associated with a transaction of this type. The transaction is targeted for closing within the next three to four months.
"This acquisition brings two great companies with incredible brand strength together. 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." said Todd Teske, Chairman, President and CEO of Briggs & Stratton Corporation.
"This is a very positive outcome for Branco customers and Briggs & Stratton. 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." stated Denise Remor, CEO of Branco.
"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," said Todd Teske.
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