Briggs & Stratton Corp. is considering the purchase of certain assets of mower manufacturer Murray, a major Briggs' customer that filed for Chapter 11 bankruptcy on Nov. 8.
The acquisition would require Briggs & Stratton to separately assess the economics of the asset acquisition and its pre-existing customer relationship with Murray, resulting in a charge of $30 million in the second quarter of fiscal 2005.
Even if Briggs & Stratton does not proceed with a transaction and another party acquires the assets of Murray or Murray implements another plan approved by the bankruptcy court, it is likely that the trade receivable from Murray will be further impaired.
Briggs expects the acquisition would exceed in value the $40 million Murray owes the company and the purchase price for the assets. A deal would require approval by the Briggs & Stratton board and bankruptcy court.