[bontai Joe]

Reuters
UPDATE - Briggs & Stratton to buy Simplicity for $227.5 mln
Wednesday June 2, 10:21 am ET

CHICAGO, June 2 (Reuters) - Briggs & Stratton Corp. (NYSE:BGG - News) said on Wednesday it agreed to acquire Simplicity Manufacturing Inc., the lawn care equipment maker, for $227.5 million in cash to expand its reach in the outdoor power equipment market.

Shares of Briggs & Stratton, a maker of small engines, rose 5.7 percent, or $4.34 to $80.09, a new all-time high on the New York Stock Exchange.

Milwaukee-based Briggs & Stratton, which also makes power generators, pressure washers and outboard motors, said it expects the acquisition to boost diluted earnings by 35 cents to 45 cents per share in fiscal 2005.

Privately held Simplicity, of Port Washington, Wisconsin, makes lawn tractors, snowthrowers and other yard equipment under the Simplicity, Snapper, Ferris and Giant-Vac brands.

The company, which distributes its products through a network of independent dealers, had net sales of $285 million for the 10 months ended April 30 and expects net sales of about $350 million for the 12 months ending June 30.

Briggs & Stratton expects the deal to close at the beginning of its fiscal 2005 first quarter.


Link:http://biz.yahoo.com/rc/040602/manufacturing_simplicity_3.html

 

[jodyand]

sj whats your take on this will it help or hurt Simplicity:question: You think maybe Snapper put them in the hole:question:

 

[bontai Joe]

As a privately held company, Simplicity had some advantages in not having to report earnings, sales and other data that publically traded companies had to make available. The association with Briggs, should mean that they get reduced cost on engines, and Briggs gets into the market as an equipment manufacturer with a proven name and existing dealer network. On the surface, it would seem like Briggs was able to become an equipment builder instead of an engine supplier, and Simplicity gets the support of Briggs' deep pocketbook. A Win-Win? We will have to wait and see.

 

[aegt5000]

Interesting…

I wonder what the reaction of other competing equipment manufactures
will be when the Briggs guy comes around to sell them engines ?
If you keep your eye on the market segment Simplicity competes in, I’ll
bet you won’t see too many of those equipment manufactures continuing
to use Briggs engine’s.

Who would you say are the competitors that really line up well against Simplicity’s tractors ($-$) and how much use do they currently make of Briggs engines?

 

[jodyand]

You make a good point aegt5000 its kind of an unfair advantaged now to the other makers of Lawn and garden tractors.

 

[leolav]

I know the Giant vac guys here in CT are up in arms over being bought by B&S. They claim they are gonna lose some serious benefits.

I can't imagine B&S not having good benefits.

 

[guest]

too bad... now only BS motors probably...

i like my kohler...

i hope it does not take away from simples fine reputation and quality...

 

[Live Oak]

B&S engines have been getting better with time. It would be a natural expansion for them to purchase a mower/GT LT manufacturer to use their engines in.

 

[Argee]

I don't know....Simplicity name is equated with top end equipment....B&S name is equated with OK to average engines....So it helps the B&S image kinda....but what does it do to the Simplicity image.

 

[Live Oak]

Briggs may be looking for an outlet for their recently marketed diesel engines. Currently, just about all small diesels are Japanese or Chinese.

 

[Neil_nassau]

We'll finally have a Briggs and Stratton lawnmower.

Everyone makes good points.....
Simplicity was acquiring companies the last few years to make itself more attractive to a potential buyer.
You grow in this business (or any) by taking share or acquiring share.That keeps shareholders happy......

Brigg's emphasis in selling their Generac pressure washers and generators has been mass merchant channel oriented. They sell Lowes those products branded as Troybilt (under license from MTD) and several other private label brands as well.

Simplicity's emphasis has been the dealer channel....other than Snapper's foray into Wallyworld before being bought by Simplicity.
It will be another matter when they start competing in the much larger mower segment with the likes of MTD,Toro,Deere and Electrolux. Honda learned that oEM interest in your engine is low when you're competing with OEM's in the mower business. Their (honda's) oem business has increased steadily since they pulled in their horns and the South Carolina plant is slowly becoming an engine plant rather than a mower plant.

As a dealer.....most of our high end riders (over 2000.00 now) are Kohler and Kawasaki units. Cub slipped a Vanguard twin(Daihatsu built) into the 2180 this year. Honda and Kawa have been coming on strong to Briggs for engines in high end walkmowers. Poor Tecumseh has been getting their butt kicked in engines and, as always, have a good refrigiration compressor business.

Want to really tax your brain? Rumor about a year ago was Electrolux was lining up to purchase Kohler's engine division.

Here's a good link for the trade. Its sometimes slow to update regularly...but it consolidates press releases for all the industry as its the old ESA combines with OPEDA.

Also, here's a link to the full release from a great site with general appliance industry news that is always up to date.

And the beat goes on.......ong:

 

[Chris]

Neil, Thanks for the wonderful dealer insight on this issue and for the links. I might consider setting up a live scrolling box to run the highlights on the main board page. Thanks again.

 

[Argee]

Thanks Neil....that kinda puts it in perspective

 

[guest]

still dont like it.. sort of like Chevy buying Saab... or ford buying jaguar a small high quality company gets bought out by a big one.. the small company tends to lose a litle of the quality.. or maybe in my eyes it just loses the perception of quality..

 

[Chipmaker]

IIRC B & S is in bed with Dihatsu in productin of their Diesel and larger 2 cylinder engines. We had diahatsu engines powering a lot of items during Desert Storm, and also in flight line equipment back stateside and those motors were virtually bullet proof. If a GI can't tear it up its got to be good. I have always like B & S motors (depending on the model and series) as B & S does make a good motor if you buy other than the cheap made ones so commonly available on BIg box store equipment which IMHO drags down any companies reputation when they cut standards and make a piece of junk just to compete and get a piece of the market. I had always been told and heard Kohler was tops, so back years ago I bought a new Troy built tiller, and it had the 8 (or maybe it was the 7hp) Kohler Magnum I C motor I thought i had a great tiller which should be pretty well trouble free........how wrong I was. Theengine broke two cam shafts in the first year of use..........but my friends Tecumseh powered 6 hp tiller kept kicking butt for over 10 years of use.........So there is good and bad in all brands, but I think overall Simplicity and all the others will benefit. Dealers will benefit also, not as many parts to have to stock........just like years ago when GM used olds engines in Chevy etc etc and got caught, now just about all otor parts among the same class are interchangeable and readily available, so the same thing could also hold true with Simplicity and B & S. There is now a larger pool of expertise and patents that can be incorporated into more items so that may be a plus as well. I would have to think the only ones on the smelly end of the stick would be other engine manufacturers kike Kohler since it will cut into their sales, possibly. A single standalone manufacturer that is not in bed with anyone in todays world is rare.

 

[jodyand]

Look at the bright side sj you have a original Simplicity be worth more money down the road

 

[Neil_nassau]

More than welcome guys........
Nothing wrong with a Daihatsu built Vanguard air cooled twin. its a great engine and probably my all time favorite in the 16-18 hp range. Although like KOhler and Kawa.the first years gave some valve train/heat related problems (that was in the early 90's).The liquid cooled engines are showing up some and their really nice. We sold a 32hp Turbo Cub last month and that was a sweet little engine.
Magnum Kohlers are ok...but not as good as Commands. KOhler hand machined everything in those days and the Commands were their first to use CAM and modern methods to produce it. I toured the Kohler factory as the Command production lines were being set up back about 1986 or so.......the old K series and magnum lines were STONE AGE! Older guys standing at all kind of machine tools checking everything by hand. Not the way to produce high volume tight spec engines required today !
Sorry,Ill get back on topic.
We received a letter from Snapper via fax ....
Soon as I figure how to convert a fax image ( we receive our faxes in our server) ..Ill post it.

Regards