Monthly Archives: June 2019

Santiago, Chile to Add 183 More BYD Electric Buses By August

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Chinese battery and vehicle maker BYD has sold an additional 183 electric buses to Santiago, Chile.

The Chilean Minister of Transportation and Telecommunications, Gloria Hutt, recently announced the new order, which is due to arrive in August.

The 183 BYD electric buses will join an existing fleet of 100 BYD electric buses that started service in December 2018. The buses are operated by Metbus.

With the new delivery, Santiago will become the largest operator of electric buses outside of China, with some 411 buses in service.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Mouser Electronics Expands Distribution Center To Keep Up With Double-Digit Revenue Growth

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Berkshire Hathaway’s Mouser Electronics, Inc., the industry’s leading New Product Introduction (NPI) distributor with the widest selection of semiconductors and electronic components, is greatly expanding its large global headquarters and distribution center to meet the needs of its flourishing business well into the next decade.

Construction is under way to add more than 125,000 square feet to the distribution center, as well as a new 50,000 square-foot office building on Mouser’s campus, located south of Dallas-Fort Worth, Texas.

Upon completion of the new construction, Mouser’s 78-acre global headquarters and massive distribution center will consist of 1 million square feet to accommodate Mouser’s vast inventory of 1 million unique SKUs for products and technologies from over 750 electronic component manufacturers.

With a positive industry outlook, double-digit revenue growth and the addition of many new manufacturer partners, the industry-leading electronic components distributor is expanding its global footprint and growing its business position to meet increasing customer demand worldwide.

In 2018, Mouser’s sales hit $1.9 billion, and the company is on track to surpass that number this year. All this comes as Mouser has expanded its full-time global workforce to more than 2,400 and is set to provide local customer service in four new global locations: Brazil, Poland, Vietnam, and the Philippines.

“With the rapid increase in technological advancements such as IoT, electric vehicles, artificial intelligence, robotics, and 5G, we definitely find ourselves in a very robust and fortunate position,” explained Glenn Smith, Mouser’s President and CEO. “We are planning for future growth as our customer needs increase.”

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Hathaway Specialty Insurance Names Mark Walker, Head of Customer and Broker Engagement for UK

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Berkshire Hathaway Specialty Insurance (BHSI) has expanded its team in the UK with the appointment of Mark Walker as Head of Customer and Broker Engagement. Mark will be based in BHSI’s London office.

“I’m extremely pleased to have Mark leading our efforts to expand our broker and customer relationships across the UK. He brings to this new role more than two decades of industry experience and a great passion and commitment to growing BHSI’s partnerships in this important market,” said Chris Colahan, President, UK and Europe, BHSI.

Mark was most recently Head of SME, Affinity & Digital, Asia Pacific at QBE. Before that, he was CEO Hong Kong at QBE. He also served as CEO, Hong Kong & Specialty at RSA and held numerous other leadership positions at RSA in the UK and Emerging Markets over more than a decade.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

South Florida Luxury Real Estate Leader Joins Berkshire Hathaway HomeServices

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Berkshire Hathaway HomeServices has announced that South Florida luxury real estate leader EWM Realty International has joined its network operating as Berkshire Hathaway HomeServices EWM Realty.

The 55-year-old, full-service brokerage is led by CEO Ron Shuffield, one of South Florida’s most respected operators in the business. It has been a wholly owned subsidiary of HomeServices of America, Inc. since 2003 – the country’s largest residential real estate company for transactions and parent to Berkshire Hathaway HomeServices.

Berkshire Hathaway HomeServices is among America’s fastest-growing real estate brokerage networks with nearly 50,000 agents and 1,500 offices joining the network in less than six years, including global network members in Berlin, Germany; London, England; Milan, Italy; and Dubai, United Arab Emirates.

“EWM Realty is at the heart of Miami’s luxury real estate market and its reputation for serving this market is unequaled,” said Ron Peltier, executive chairman of HomeServices of America. “Joining the Berkshire Hathaway HomeServices network, recognized for its luxury focus and expertise and now its global connections, represents a truly unique opportunity for the brokerage, its associates and its buyers and sellers. EWM has been a valuable member of the HomeServices family for 16 years and we look forward to the company’s continued growth and success as Berkshire Hathaway HomeServices EWM Realty.”

Gino Blefari, CEO of HomeServices of America and chairman of Berkshire Hathaway HomeServices, welcomed EWM Realty to the brand. “Ron Shuffield and his team are highly respected across South Florida and their presence as a luxury leader will benefit our network,” Blefari said. “We are proud to welcome their brokerage and eager to help it grow.”

Shuffield said he and his team look forward to a new era of growth. “As a proud member of the HomeServices of America family, we are excited to join the Berkshire Hathaway HomeServices network,” said Shuffield. “The brand has a strong presence in Florida with other fine brokerages throughout the state. In addition, we believe the Berkshire Hathaway HomeServices brand is wonderfully suited for the luxury, resort and second-home markets we serve.”

EWM Realty gains access to Berkshire Hathaway HomeServices’ active referral and relocation networks, and its “FOREVER Cloud” technology suite, a powerful source for lead generation, marketing support, social media, video production/distribution and more. The brand also provides global listing syndication, professional training and ongoing education and the exclusive Luxury Collection marketing program for premier listings. Its Prestige Magazine showcases network members’ premium listings with a strong lineup of feature stories covering topics that appeal to high-end real estate consumers.

“South Florida is a global hub for business, travel and real estate investment,” Shuffield said. “We are eager to connect our brokerage with even more luxury clients from the northeast, Atlantic seaboard as well as from Europe and Dubai, where the brand is quickly growing. We believe that Berkshire Hathaway HomeServices EWM Realty will be a compelling option for those buying and selling luxury property.”

Shuffield said the same message applies to South Florida’s luxury real estate professionals. “We want to grow our brokerage by adding more of the region’s skilled and seasoned luxury agents,” he explained. “Berkshire Hathaway HomeServices EWM Realty will stand as the symbol for high-end real estate in our region and the company at which top agents may expand their businesses.”

© 2019 David Mazor


Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Commentary: Has the Time Finally Come for Berkshire to Cash Out of Axalta?

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Has the time finally come for Berkshire Hathaway to cash out of its minority position in Axalta?

Back in 2015, Berkshire Hathaway acquired roughly 10% minority stake in Axalta Coating Systems from The Carlyle Group for $560 million, or $28.00 per share. Axalta is a leading global coatings provider for vehicles and industrial applications.

Since that time it’s watched its investment flounder, as the Philadelphia-based Axalta fought off being acquired by PPG, and spurned another potential merger with Dutch coatings company Akzo Nobel.

Nippon Paint was another company that was interested in Axalta, only to have the company reject a $9.1 billion all-cash bid that it made near the end of 2017.

2017 was also a year of internal turmoil for the company. Axalta parted ways with its newly hired CEO, Terrence Hahn, after only five weeks on the job. The dismissal came after an internal investigation turned up conduct that Axalta “believes was inconsistent with company policies.”

Chief financial officer Robert Bryant took over as CEO and remains in that position today.

Apparently, Axalta was a company unwilling to be taken over by anyone.

Now, Axalta finally seems ready to enhance shareholder value, and a takeover has become more likely.

“Axalta’s Board is committed to maximizing value for all shareholders and has initiated a comprehensive review of strategic alternatives, including a potential sale of the Company, changes in capital allocation, and ongoing execution of our strategic plan,” according to Axalta director Mark Garrett.

With a sale of the company finally on its board’s agenda, could this be the time for Buffett to finally get something for his investment?

Nippon Paint, PPG, and Akzo Nobel are all among the potential players, and the market has quickly recognized that this time may finally be different for Axalta.

Axalta (AXTA) closed on Friday at $29.99, making Berkshire’s stake worth $727,677,360. And it’s now trading above its 52-week high of $30.94 in Friday’s after-hours trading.

Hopefully there’s more good news to come.

Finally.

© 2019 David Mazor


Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Panama Has Big Plans for BYD’s e-Taxis

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Chinese battery and vehicle maker BYD has taken the first steps on what will be a major fleet of e-taxis in Colón, Panama.

BYD has delivered the first seven e-taxis for a planned fleet of 1,500 e-taxis in Colón, with 90 more to be on the road by the end of 2019.

The seven BYD e6 sedans provide service to tourists and locals visiting the Atlantic entrance to the Panama Canal.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkadia Secures JV Equity Financing for TRIBECA Condo Development in D.C.

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Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has arranged the JV equity financing for The TRIBECA, a new condo development by Urban Investment Partners (UIP) in the rapidly growing NoMa submarket of Washington D.C.

The team, consisting of Noam Franklin, Chinmay Bhatt and Cody Kirkpatrick, leading Berkadia’s new JV Equity & Structured Capital, arranged the equity partner, a private capital group, for UIP while they were with Central Park Capital Partners (CPCP), which was sold to Berkadia in March 2019.

“Ground up condo projects in today’s market are tough to get capitalized, but we were able to quickly find UIP a partner for this opportunity due to the developer’s expertise in the DC area and lack of new supply in the emerging neighborhood of NoMa,” said Franklin. “We are always impressed with UIP’s vision for their projects and investing across multiple cycles with success.”

The TRIBECA, a transit-oriented development, will feature 99 market-rate condominium units in the highly desirable NoMa submarket, a neighborhood with a limited upcoming condo supply. The 13-story building will include a mix of one- and two-bedroom homes, as well as a fitness center, bike storage, garage parking and a rooftop deck.

The site is located at 39-41 New York Ave., just one block from the NoMa-Gallaudet University Metro station. Construction has commenced with an expected completion in late 2020.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation (now known as Jefferies Financial Group), Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA.

The company is among the top Freddie Mac and Fannie Mae multifamily lenders.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Lubrizol Announces Global Collaboration with Corbion

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The Lubrizol Corporation has created an exclusive global partnership with Corbion Biotech, Inc, bringing AlgaPur(TM) high stability high oleic algae oil to the personal care and cosmetics markets.

Based in the Netherlands, Corbion is a global market leader in algae ingredients. This collaboration combines Lubrizol’s formulation experience and knowledge of the personal care market with Corbion’s innovative bio-based solutions and sustainable practices.

AlgaPur(TM) High Stability High Oleic Algae Oil is a unique algae oil with formulation and performance benefits for a diverse range of personal care applications. Key benefits include:

• Elegant sensory experience: Silky, non-greasy feel providing excellent hydration and ease of spreadability
• Stable for formulating: Superior oxidative stability with over 90% Omega-9 oleic acid, allowing for extended shelf life
• Mild formulations: Free from known allergens, low odor and neutral color
• Sustainable production: Palm-free, and produced with a low carbon, land and water footprint

Bio-based ingredients and sustainable solutions are a developing trend in the personal care industry, experiencing significant global growth. “This new collaboration allows our innovation teams to expand our formulation expertise, bringing innovative bio-based solutions with excellent performance attributes,” states Jean Claude Deneuville, global director agile businesses at Lubrizol.

“Working with Lubrizol provides the opportunity to expand access and adoption of AlgaPur(TM) High Stability High Oleic Algae Oil in the personal care market,” says Marc den Hartog, executive vice president of Innovation Platforms at Corbion. “Corbion’s unique algae oil ingredient is a versatile, new ingredient for formulators to help meet consumers demands for sustainable, traceable and high-performance products.”

Corbion is the global market leader in lactic acid, lactic acid derivatives, and a leading company in emulsifiers, functional enzyme blends, minerals, vitamins and algae ingredients. Corbion is a global player in personal care, offering natural, safe and cost-effective ingredients, widely known for its their emulsification, moisturizing, pH adjustment and antimicrobial functions.

In 2018, Corbion generated annual sales of € 897.2 million and had a workforce of 2,040 FTE.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD is the Latest Way to Get to Disneyland

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Chinese battery and vehicle maker BYD will soon be giving you a lift to Disneyland.

Anaheim Resort Transportation (ART) has announced that it would add 40 of BYD’s all-electric buses to its fleet serving the renowned tourist destination.

In 2013, BYD opened its U.S. electric bus manufacturing plant in nearby Lancaster, California, and in April 2019 delivered its 300th bus for the U.S. market.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

NetJets Threatens to Move Out of Ohio if Tax Breaks Repealed

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Berkshire Hathaway’s NetJets is threatening to move its business out of Ohio if proposed tax changes included in Ohio’s state budget become law.

The repeal proposal included in the House budget package removes the cap on sales taxes of fractionally owned aircraft. The cap was enacted in 2003 and is currently set at $800.

Also to be repealed would be a tax exemption for sales of property and services to maintain and repair fractionally owned aircraft.

“NetJets would either have to pass this tax obligation through to its customers which would adversely affect NetJets competitiveness by increasing the price of its products or alternatively, it would have to incur the tax impact itself thereby negatively affecting its profitability,” Bradley Ferrell, Executive Vice President of Net, says. “Neither of these options would be palatable to NetJets long term. Instead, NetJets would be forced to consider other states with more favorable sales tax environments. And there are plenty.”

The tax breaks also benefits NetJets’s Cleveland-based competitor, Flexjets.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.