Category Archives: Acquisitions

MiTek Acquires Wrightsoft

(BRK.A), (BRK.B)

Berkshire Hathaway’s MiTek Industries has acquired Wrightsoft Corporation, a leading provider of software for residential and commercial energy code compliance and HVAC system design. Wrightsoft is headquartered in Lexington, Massachusetts

“I’m thrilled with the acquisition of Wrightsoft, as this expands our technology leadership into a new area of residential and commercial construction for MiTek: energy load calculation and HVAC system design,” stated Tom Manenti, Executive Chairman of MiTek. “Aligned with our current software platforms, Wrightsoft will provide MiTek a new software extension into this essential aspect of residential and commercial construction. The resources MiTek brings to bear, coupled with Wrightsoft’s deep industry relationships, unique expertise, and proprietary software, will provide unequalled capabilities and efficiencies to MiTek’s growing residential and commercial customer base.”

“We are delighted to welcome Bill Wright and his leadership team to the MiTek family, and we look forward to working with them to continue providing exemplary service to their customers and growing Wrightsoft’s business,” Manenti commented.

Bill Wright, founder and President of Wrightsoft added, “We have successfully partnered with MiTek for a number of years now, and I am excited Wrightsoft has joined the MiTek and Berkshire Hathaway family. MiTek’s values-based approach to leadership combined with its vision of providing unsurpassed, value-added technology to the global residential and commercial construction industry, make this a perfect fit for Wrightsoft and all its employees.”

© 2017 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’s HomeServices of America Acquires Houlihan Lawrence

(BRK.A), (BRK.B)

In a major acquisition, HomeServices of America, Inc., a Berkshire Hathaway company, has added over a thousand sales associates in the New York Area. HomeServices has acquired Houlihan Lawrence, one of the leading real estate firms serving New York City’s northern suburbs.

Financial terms of the transaction were not disclosed.

Headquartered in the northern suburbs of New York City, Houlihan Lawrence serves the Westchester, Fairfield, Putnam, Dutchess, Orange and Ulster counties of New York and Connecticut with 1,300 sales associates operating in 30 sales offices. In 2016, Houlihan Lawrence closed $6.7 billion of sales volume.

Established in 1888, Houlihan Lawrence has been known to generations of buyers and sellers for its leadership in luxury representation and local expertise delivered by a team of knowledgeable agents coupled with the firm’s renowned advanced technologies and data driven insights. Nancy Seaman will step aside as chairman while her brothers Stephen Meyers, president and CEO, and Chris Meyers, managing principal, will continue to lead the firm’s strategic growth initiatives and manage day-to-day operations together with their sales management teams. Houlihan Lawrence, like other locally-branded brokerage companies under the HomeServices umbrella, will retain its name.

“We are joining an organization known for its strength and stability,” said Stephen Meyers. “Our partnership secures the future of the firm without changing the exceptional culture that is core to our storied brand. We are thrilled with this announcement and the many benefits it brings to our clients and agents.”

“When you combine the incredible strength of our people and the remarkable history of our success with the unsurpassed financial stability of HomeServices, there is no limit to what we can accomplish,” added Chris Meyers.

“Nancy, Stephen and Chris, together with their team of sales managers and agents, have built an extraordinary organization and exemplify a level of expertise and leadership that is second-to-none in the real estate business today,” said Ron Peltier, chairman and CEO, HomeServices. “Their culture of integrity and innovation closely aligns with our corporate vision and our emphasis on customer value and results.”

With this transaction, HomeServices has nearly 29,500 real estate professionals operating in nearly 570 offices across 28 states. In 2016, the company’s associates facilitated more than $93 billion in residential real estate sales.

© 2017 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.

MiTek Acquires DIY Technologies

(BRK.A), (BRK.B)

Berkshire Hathaway’s MiTek Industries, Inc., a diversified, global business supplying a wide range of engineered products; proprietary business management and design software; and automated equipment to the construction and industrial markets, has acquired DIY Technologies. Terms of the acquisition were not announced.

Headquartered in Tucson, Arizona, DIY is a market leader in web-based design software for a wide range of home improvement and renovation projects.

“I am delighted with the acquisition of DIY, which has an enviable leadership position as a provider of on-line design software to the do-it-yourself, home improvement market. This acquisition is yet another extension of our leading position in technology serving the residential construction industry,” stated Tom Manenti, Chairman and CEO of MiTek. “DIY has established long-term relationships with some of the nation’s largest and most-respected retailers and building-products manufacturers. The combination of MiTek’s software and capital resources, along with DIY’s comprehensive web-based software, will provide unparalleled technology tools that will enhance our customers’ value proposition.”

“We are thrilled to welcome Michael Heisler and his team to the MiTek family and look forward to supporting their business model while expanding their software offerings and services, as we continue to grow DIY’s business,” Manenti commented.

Michael Heisler, CEO and founder of DIY added, “This acquisition is the culmination of more than ten years of successful partnering with MiTek. I am excited that DIY and all our employees have joined the MiTek and Berkshire Hathaway family. I have seen how MiTek truly ‘lives’ its core values, and because of this and its compelling vision of providing unrivaled, highly productive technology to the global residential and commercial construction industry, I know MiTek is the ideal home for DIY.”

© 2017 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.

Richline Group Acquires International Jewelry Manufacturer

(BRK.A), (BRK.B)

Berkshire Hathaway’s Richline Group, a leading jewelry manufacturer and marketer, has acquired The Aaron Group. No terms of the acquisition were announced.

Since its founding as Samuel Aaron Jewelry in 1950, the Aaron Group has grown from its New York City roots to become a widely renowned, vertically integrated international jewelry manufacturer. Along the way, the Aaron Group has remained a true family business and, under the stewardship of third-generation leader Robert (Bobby) Kempler, has achieved stature as a major global force, with operations, factories, partnerships and hundreds of employees in New York, London, Mumbai, Hong Kong, and Guangzhou.

“We are extremely excited and energized about joining forces with The Aaron Group. The Aaron Group’s differentiated, prime-manufactured products will offer Richline’s retail partners a dramatic new range of options and increased value, while preserving the legacy of customer satisfaction that both companies prioritize,” said Dave Meleski, Richline Group’s President.

Richline’s CEO, Dennis Ulrich, said “this acquisition will allow The Aaron Group to continue as the leader of bridal, three-stone and fashion diamond and gemstone fine jewelry while leveraging Richline’s advanced capabilities across our entire jewelry value chain.”

Per Aaron Group President, Robert Kempler, “Richline Group support will enable The Aaron Group to grow faster, introduce new designs and collections more rapidly, and expand on our history of success by reaching a broader array of customers and markets. Our mutual goal is to anticipate, foster and drive positive change in our industry.”

About The Aaron Group

The Aaron Group is an international jewelry manufacturer with hundreds of employees in offices around the world. A firm believer in the power of jewelry to connect people, The Aaron Group has grown from its 1950 founding as a one-man shop to become globally recognized in the jewelry industry, with an unblemished reputation for quality, value, and commitment to the customer.

© 2017 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.

M&M Manufacturing Snaps Up Snappy Company

(BRK.A), (BRK.B)

Berkshire Hathaway’s MiTek Industries, Inc., through its subsidiary, M&M Manufacturing, has acquired Snappy Company, a leading supplier of metal duct systems for the residential HVAC market.

Snappy has manufacturing facilities in Detroit Lakes, MN; Medina, NY; and corporate offices in Marietta, GA.

According to MiTek, Snappy will complement M&M Manufacturing, a leading producer of sheet metal products, primarily servicing the air distribution and ventilation markets. M&M Manufacturing will invest in Snappy’s manufacturing capabilities, expertise, and infrastructure.

“We are excited to welcome Snappy in the family of MiTek companies,” stated Tom Manenti, Chairman and CEO of MiTek. “The experience and relationships of Snappy and M&M will be leveraged across all of our manufacturing platforms in order to expand capacity and customer service levels. Combining the manufacturing capacities of M&M Manufacturing and Snappy will allow both companies to better serve our customers and grow in the markets we serve together.”

“Snappy has been a market leader for more than 60 years,” added Rob Felton, President of M&M Manufacturing, “and Snappy’s reputation has been built on a heritage of great customer service, product innovation, and a focus on people. That’s a perfect fit for M&M Manufacturing, and we look forward to leveraging each others’ expertise and capabilities.”

Snappy is a leading supplier of metal pipe and fittings for the residential HVAC market, and the company is recognized for remarkable innovation, quality products, and impeccable service. Since 1955, Snappy has been a trusted resource to HVAC distributors and contractors. With a full line of components that fit together seamlessly and are safe for end users, the company manufactures approximately 4,000 SKUs of galvanized pipe, duct and fittings, as well as complementary accessories, including drain pans, aluminum and venting products.

© 2016 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.

CTB Acquires Volito Group B.V.

(BRK.A), (BRK.B)

Do you want chicken or fish? Whether you are picking an airline meal, or the entrée at your favorite restaurant, Berkshire Hathaway is very likely to be involved in bringing it to you.

Just days after Berkshire Hathaway’s CTB, Inc. finalized the purchase of a majority share in Cabinplant A/S, one of the world’s leading manufacturers of processing equipment for vegetables and fish, CTB has announced that it has acquired the Volito Group B.V., a designer and manufacturer of cage-free layer housing systems.

Volito has three locations in the Netherlands, including its headquarters in Veenendaal and manufacturing plants in Dodewaard and Amersfoort, all southeast of Amsterdam, and works through a global partner network.

Terms of the transaction were not disclosed.

Volito’s core products include aviary and nest systems for commercial layers (hens which lay eggs for consumption), nest systems for layer breeders (hens which lay hatching eggs) and rearing systems, as well as egg collection equipment, slats and perches. One of the earliest manufacturers of aviary systems, Volito’s cage-free hen housing complements the laying system offerings of CTB’s Chore-Time business unit, which include Chore-Time’s cage and colony systems, its widely used Ultraflo® feeding system, and drinkers, egg collectors and ventilation equipment.

“An early pioneer of aviary systems, Volito brings a long legacy and knowledge base of cage-free systems,” said CTB’s chairman and chief executive officer Victor A. Mancinelli. “Their first designs were installed in Switzerland more than 25 years ago, and their installed base now covers many other European countries as well,” Mancinelli went on to say. “Volito’s products will provide our customers with a complete line of aviary and nest systems through our worldwide Chore-Time distribution network.”

Volito was founded in 1989 based on the vision that aviary systems were the future, even outside Switzerland. Since then, the company has successfully installed and is servicing thousands of poultry houses with aviary systems and/or nest systems. In recent years, the company added new ranges of aviary systems, including Valego, an advanced and patented nest system for layers and breeders.

Commenting on the acquisition, Hans Donker, general manager of Volito, stated, “We are pleased that Volito will now have the resources and backing of CTB to extend its reach into additional market areas. CTB is a strong partner and will also benefit from Volito’s expertise. Our long history with cage-free technology should be welcomed by Chore-Time’s customers seeking cage-free options.”

© 2016 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.

CTB Completes Purchase of Majority Share in Denmark-Based Cabinplant

(BRK.A), (BRK.B)

Berkshire Hathaway’s CTB, Inc. has finalized the purchase of a majority share in Cabinplant A/S, one of the world’s leading manufacturers of processing equipment for vegetables and fish.

Cabinplant’s poultry processing equipment complements that made by CTB’s Meyn poultry processing subsidiary.

The acquisition agreement was originally announced on September 5, 2016. Terms of the transaction were not disclosed.

The acquisition adds tailor-made processing solutions for fish and shellfish, fruit and vegetables, and convenience foods, as well as additional poultry processing equipment to CTB’s existing line of Meyn processing equipment for poultry. Cabinplant’s high-yield processing solutions broaden the range of processing options CTB can offer customers in the food industry.

About CTB

Acquired by Berkshire Hathaway in 2002 for $180 million, CTB is a leading global designer and maker of systems and solutions for storing, conveying and preserving grain; producing poultry, pigs and eggs; and processing poultry, fish, vegetables and other foods.

© 2016 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.

Richline Group Acquires Silpada Designs

(BRK.A), (BRK.B)

Richline Group, Inc., a wholly-owned subsidiary of Berkshire Hathaway, has acquired select assets of Silpada Designs, including the “Silpada” brand name, its jewelry designs and all sterling silver and fashion jewelry inventory.

Terms of the transaction were not disclosed.

From its humble beginnings as a business founded by stay-at-home moms, Silpada saw stunning success, becoming the world’s largest home party seller of sterling silver jewelry. Over the past three years significant investments were made to keep Silpada operating as the company worked to enhance and evolve its business to remain relevant in an evolving market.

As it struggled, the company shut down its online business earlier this year.

Richline Group, a manufacturer and marketer of fine jewelry brands, will continue to produce and market the Silpada brand through new channels, focusing on Silpada’s sterling silver jewelry heritage.

While the Kelly and Walsh families will no longer be a part of Silpada moving forward, they are “extremely pleased that the Silpada brand will live on as a member of the Richline family of brands.”

“We see a tremendous opportunity to bring Silpada back to its creative roots. We plan to focus exclusively on these unique and accessible sterling silver designs that have clearly resonated with so many women across the world. We look forward to honoring the Silpada legacy while finding new ways to invigorate this unique and nationally-recognized brand”, said Richline Group CEO, Dennis Ulrich.

Going forward Richline plans to refocus the Silpada name around its sterling silver offerings. For the balance of 2016, Richline will continue serving Silpada’s loyal customer base with the core products Silpada is best known for, as well as a previously unreleased line of jewelry, as it refines a new direction forward for this national leader in silver jewelry.

In addition to ongoing retail sales for the brand, Richline will continue honoring the Silpada Lifetime Guarantee that was in place prior to June 1, 2016 for all qualified purchases until September 2017.

© 2016 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.

Marmon Acquires Pasta Equipment Maker

(BRK.A), (BRK.B)

Berkshire Hathaway’s Marmon Food, Beverage & Water Technologies Company has acquired Dominioni Punto & Pasta S.r.l., a leading Italian supplier of commercial pasta equipment, by Marmon Pasta Solutions S.r.l.

Terms of the acquisition were not disclosed.

Founded in 1968 by Pietro Dominioni, the family-run business designs and produces professional pasta equipment for the restaurant, hospitality, and catering markets, as well as high-volume pasta manufacturers. The business will continue to operate under the Dominioni brand name and its operations will remain based in Lurate Caccivio (Como). Fabrizio Dominioni, son of the founder, will continue to manage the business.

Fabrizio Dominioni said: “I am pleased that my family’s business is now part of Marmon and Berkshire Hathaway. Marmon is a strong, successful company and a global leader in the foodservice equipment industry. Our new home within Marmon will enhance our competitive position and our opportunities for growth now and in the future.”

The acquisition is Marmon’s second this year of an Italy-based foodservice equipment company. In June, Marmon Italia acquired Angelo Po of Carpi (Modena).

Angelo Po designs and manufactures professional kitchen equipment including horizontal and vertical cooking products and food preservation systems for caterers and restaurants in Europe, Asia, and North America. Dominioni and Angelo Po are both part of the Restaurant & Catering Technologies Sector within Marmon Food, Beverage & Water Technologies Company.

Fabrizio Valentini, President and CEO of Marmon Food, Beverage & Water Technologies Company, said: “Dominioni is an important addition to our organization. With Angelo Po, it will significantly contribute to our company’s growth, both geographically and technologically, as we continue to invest in the worldwide foodservice, restaurant, and catering market.”

Massimo Aleardi, Sector President of Marmon Restaurant & Catering Technologies, added: “We are excited for Dominioni to join our group. Dominioni has established high standards for quality, reliability, and service. Its products, which also complement Angelo Po’s portfolio, are well regarded in the foodservice industry. Its innovative equipment solutions help meet the growing demand for fresh food while also enabling more efficient production. We look forward to building on Dominioni’s excellent reputation not only throughout Europe, but also globally.”

© 2016 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.

Boston Auto Dealership Group Keeps Getting More Attractive to Berkshire Hathaway Automotive

(BRK.A), (BRK.B)

When Berkshire Hathaway jumped into the auto retailing business in March 2015, with its $4.1 billion acquisition of the Van Tuyl Group, it added a whole new line of business to the mega-conglomerate.

The Van Tuyl Group was the largest privately owned auto dealership group in the U.S., and instantly made the newly christened Berkshire Hathaway Automotive Group the fourth largest dealership group in the U.S.

The Van Tuyl acquisition was just the beginning, Warren Buffett noted in his 2015 Berkshire Hathaway Chairman’s Letter, stating, “…if we can buy dealerships at sensible prices – we will build a business that before long will be multiples the size of Van Tuyl’s $9 billion of sales.”

BHA got off to a promising start, as that same month it acquired Frank Kent Honda of Fort Worth, Texas.

“This is the beginning of a journey that will have no end,” Buffett noted upon completion of the acquisition. “Cecil and Larry have given us the ideal platform with which to build an auto dealership business that will be thriving and growing 50 and 100 years from now. The fun has just started.”

Unfortunately for Berkshire, the acquisition of also Van Tuyl set off a dramatic rise in auto dealership valuations that has rippled throughout the industry, and frustrated efforts for Berkshire to add new dealership groups at what it feels are reasonable valuations.

At the 2016 Berkshire Hathaway annual meeting, Buffett acknowledged that they “hadn’t had much luck” in acquiring more dealerships.

BHA finally made some progress in June, acquiring North Park Toyota in San Antonio, Texas. The acquisition includes a 20-year lease of North Park Toyota’s 23.7-acre property that includes an option to buy.

The Problem is Soaring Valuations

The steep rise in valuations has kept Berkshire Hathaway Automotive mostly on the sidelines even as the Kerrigan Advisors’ Blue Sky Report showed that U.S. dealership buy/sell activity soared to record highs in 2015. The Report noted “activity by new entrants outpacing public company acquisitions by over four to one.”

The Blue Sky Report showed that while the competition for auto dealerships was fierce in 2015, it did not favor the public companies, which in addition to Berkshire Automotive also includes CarMax and Penske Automotive Group.

“A number of iconic multi-dealership groups came to market in 2015 and were acquired by both established consolidators and new entrants. Faced with this stiffer competition, the publics found it more difficult to compete for larger group transactions, and represented just 7% of the buy/sell market in 2015. Meanwhile new dealership buyers, including family offices, private equity firms, and public conglomerates, acquired 29% of the franchises sold, a stunning accomplishment,” said Erin Kerrigan, Managing Director of Kerrigan Advisors. “We believe new entrants will increasingly shape dealership consolidation and meaningfully impact the future of auto retail.”

The Blue Sky Report went on to note that while the market for auto dealerships is still very active, the market may be peaking.

“In 2015, dealership valuations rose to historically high levels, new entrants made sizable acquisitions, manufacturers approved numerous multi-dealership transactions, and real estate prices returned to pre-recession levels,” continued Kerrigan. “In summary, it was a year that is hard to beat. While the 2016 buy/sell market is expected to be as active as 2015, we anticipate the proportion of sellers completing a successful sale could decline as industry growth plateaus and dealership earnings flatten.”

A Boston Plum Waiting to be Picked

Despite the rise in dealership valuations, or maybe because of them, a plum Boston dealer group looks all the more perfect with its opening of two new dealerships.

Herb Chambers Companies, a privately-held, Boston-based, dealership group with 57 total dealerships, looks to be the perfect fit for Berkshire Hathaway Automotive.

The company already sells more cars than anyone in New England, and in June it opened Herb Chambers Lincoln of Norwood and Herb Chambers Volvo Cars Norwood.

Is it for Sale?

Herb Chambers Companies is owned by Herb Chambers, a former copier salesman who has spent the past thirty years building a first class dealership group that is the 12th largest privately held auto group in the nation.

Herb Chambers has already stated that he would sell if the price is right. He also credits Warren Buffett’s Van Tuyl Group acquisition for boosting his personal net worth to some $1.5 billion, as valuations jumped throughout the whole sector.

Chambers Knows When to Sell

Herb Chambers is certainly not afraid to sell when the time is right. Three decades ago he founded A-Copy America, and after merging it with Ikon Office Solutions, he cashed out with a sale to Ricoh. It was a shrewd move, and Chambers has proved to be a shrewd guy.

With auto sales possibly peaking, now may be the time. Could the perfect exit strategy for Herb Chambers this time involve Berkshire?

© 2016 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.