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Briggs & Stratton Corporation Message Board

  • fewdolmo fewdolmo Dec 8, 2004 12:59 PM Flag

    Murray Update?

    Anyone here anything new re possible BGG and Murray deal?
    TIA

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    • Briggs announced a bid of $150 million for Murray assets plus the cost of Murray's real estate:

      http://www.nashvillecitypaper.com/index.cfm?section_id=10&screen=news&news_id=37
      883


      This is moving as expected. Briggs would pick up tractor, walk-behind, and snow-blower business (wonder how Sears/Craftsman will feel about that?), rounding out their commercial, power gen, power washer, and marine outboard offerings.

      What a great strategy. The Briggs Store, to me, is just around the corner. But can they pull off a retail strategy, when they're used to doing direct OEM sales? That remains to be seen. I just can't see them wanting to work with WalMart etc. in the long term.....

      Disclaimer: As always, IMHO. Position disclosure: Flat (BGG, S, WMT)

      wsj

      • 3 Replies to wallstreet_jim
      • All need to understand that B&S for
        years has had great relationships with
        the big box retailers. They never
        relied on the OEM to do their marketing for
        them.

        B&S had just created new Snow Engines
        for Sears working with the key people
        in Chicago Sears.

        Murray is a steal for them. They can
        not consolidate this with Snapper/Simplicity.

        The only think B&S need to worry about
        is someday the Chinese will get their small
        engine right and then you will see a deterioration in prices, but until then
        B&S is diffently dominate.

      • wsj, thanks for the post.

        Only a guess right now but it appears that Murray accounted for about 10% of BGG revenues or about $200 million. If the bid price of 150 million holds and adding the 40 million receivable (assumoing it is not part of the 150) would result in a purchase price of less than 1x sales. A very good deal.

        I wonder if Murray is still manufacturing snd selling product under protection of the bankruptcy court? Purchasing a going business would certainly be a lot better than trying to resurect one.

      • Hey Jim,

        Thanks for your update. You are consistently a timely source for info. Much appreciated. Even though there was no official press release the news was clearly out today and the stock reacted well. We just have to keep in mind that with this acquisition they would take a 30M charge (balance of A/R). I wonder how good a deal they are getting?

        Z

    • Murray's not been profitable for a few
      years. Mainly you have to look at the big box retailers, alll they want is better products and lower prices each year. OEM are caught between the Engine maker and the OEM. OEM have
      very little value added. Thus this is what happens (especially if you supply Wal-Mart and
      Home Depot)

    • I figured they are not profitable. I know the industry I know the Wal-Mart effect. But can you quantify their loss?

      Thanks

      Z

    • B&S will consolidate.

      Remember Murray makes product
      for Craftsman (Snowblowers) that
      is the same quality as a snapper.
      Simplicity is another story.

      Remember Lawn Mowers are just
      assembly plants. The real deal
      is in the engineering and quality
      control both of which are very strong
      elements of B&S.

 
BGG
19.10+0.11(+0.58%)Jul 22 4:03 PMEDT

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