Briggs & Stratton Corporation announced that the company and its subsidiary, Briggs & Stratton Power Products Group, LLC, have signed a definitive agreement to acquire outdoor appliance maker Simplicity Manufacturing, Inc. of Port Washington, WI, U.S. for a total consideration of $227.5 million in cash, subject to adjustments.
Simplicity Manufacturing, whose lawn and garden appliances are distributed through independent dealers under the brand names Simplicity, Snapper, Ferris, and Giant-Vac, had net sales of $285 million for the 10 months ended April 30, 2004 and anticipates net sales of approximately $350 million for the 12 months ending June 30, 2004.
Briggs & Stratton, a producer of air-cooled gasoline engines for outdoor power equipment, expects that the acquisition will be accretive to diluted earnings by $0.35 to $0.45 per share in fiscal 2005 based on preliminary purchase price allocations. The transaction is targeted for closing at the beginning of Briggs & Stratton's fiscal 2005 first quarter, at which time Simplicity Manufacturing will become part of the Briggs & Stratton Power Products Group.
"The acquisition is another step in Briggs & Stratton's strategy to present an ever more compelling value proposition to consumers of our products and superior returns to our shareholders," John S. Shiely, Briggs & Stratton's CEO, said in a statement. "Consistent with the various elements of this strategy, we intend to redouble our efforts to build closer relationships with our OEM and retail customers from an operational, sales, and marketing perspective. We will more aggressively promote our brands to consumers. We will engage our industry-leading service network to provide more effective customer support, and we will continue to extend our cost leadership value discipline to end products."
Simplicity Manufacturing is Briggs & Stratton's second acquisition in 3 years that has focused on engine-powered products. "We believe we have proven with our acquisition and subsequent performance in the generator/pressure washer segment that we can deliver on our value commitment to customers and shareholders," stated Mr. Shiely.
"We're pleased with the acquisition," said James A. Wier, Simplicity Manufacturing's chief executive officer. "We believe Briggs & Stratton has the financial resources and support to allow us to continue our current growth strategy."
Mr. Wier added that Simplicity's management team and production facilities will remain in place and continue to focus on delivering products sold through the independent dealer channel. "We plan to operate as part of Briggs & Stratton Power Products Group and will aggressively seek synergistic opportunities with the entire Briggs & Stratton organization," he said.
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