Briggs Buys Brazil's Branco
Briggs & Stratton announced it has signed a definitive agreement to acquire Companhia Caetano Branco of Brazil for approximately $60 million, subject to post-closing adjustments. Founded in 1936, Branco is manufacturer of a broad range of power equipment used primarily in consumer and light commercial applications in Brazil. Its products include generators, water pumps and light construction equipment sold through an independent network of over 1200 dealers throughout Brazil. Branco employs approximately 150 people in Brazil.
Briggs & Stratton Chairman, President and CEO Todd Teske called the acquisition "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." He added, "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."
Briggs & Stratton said it 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, Briggs & Stratton said. The transaction is targeted for closing within the next three to four months.
"This is a very positive outcome for Branco customers and Briggs & Stratton," said Denise Remor, CEO of Branco. "The Branco business is a leading brand in Brazilian light power equipment with a very strong distribution network in Brazil. Its brand strength and current operational performance can only add to the strength of a company like Briggs & Stratton."