Category: Acquisitions

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Acquisitions

Pilot Company Is Now a Berkshire Hathaway Subsidiary

Berkshire Hathaway has moved from a minority ownership stake to a majority ownership stake in Pilot Company, the largest operator of truck stops and rest stops in North America.

In January, Berkshire acquired its long-planned 80 percent equity position in Pilot from the Haslam family, and the family continues to have a 20 percent stake in the company.

In 2017, Berkshire took a 38.6% stake in Pilot, which has 800 locations under the Pilot and Flying J brands.

Pilot is currently in the midst of its three-year $1 billion New Horizons project that is its most significant investment in store modernization to date. It will fully remodel more than 400 Pilot and Flying J travel centers and make additional upgrades at several more locations across the country.

© 2023 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.

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Acquisitions

Marmon Holdings Acquires AP Emissions Technologies

(BRK.A), (BRK.B)

Berkshire Hathaway’s Marmon Holdings Inc. has acquired AP Emissions Technologies, a leading innovator of emissions control products serving the North American automotive aftermarket. The company is one of the largest tubing manufacturers in the U.S., producing 6,000 miles of tubing per year.

The acquisition was effective Jan. 1, 2023.

Founded in 1927 and headquartered in Goldsboro, North Carolina, AP Emissions Technologies is a vertically integrated manufacturing operation with plants in Hobart, Indiana, and Langhorne, Pennsylvania.

In total, the company employs more than 750 people.

“Marmon was the right buyer for our employees, our customers and our suppliers to take AP to the next level and carry on the company mission,” noted previous owner Vange Proimos. “AP and Marmon have the same principles: investing in its most valuable asset, its people, while remaining focused on developing category leading innovations for the customer.”

The AP management team will continue to lead the business under the leadership of Rich Biel, president and longtime Marmon executive. “I am excited to work with Gary Nix and the whole AP team as we begin this new chapter of an outstanding company,” Biel said. “As part of Marmon, AP will accelerate investments in innovation and automation to make our products even better and grow in value to our customers.”

© 2023 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 a 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.

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Acquisitions

Berkshire’s Exponential Technology Group Acquires Braemac Pty Ltd.

Berkshire Hathaway, through one of its subsidiaries, has reached a definitive agreement to acquire Braemac Pty Ltd., a specialist in product design, development, testing, and the supply of semiconductors, systems, and electronic components. The financial terms of the deal were not disclosed.

Braemac is based in Sydney, Australia, with 17 offices globally and offers support from design through to product realization, driving innovation with industry-leading semiconductor and electronic component partners providing extensive design and supply chain management expertise.

“We welcome the Braemac team to the XTG family of companies,” said Glenn Smith, acting President of the Exponential Technology Group. “Braemac brings a very experienced management team and a business model that fits extremely well into XTG’s vision of helping engineers solve technical problems as well as having the experience and expertise to design a customer’s smart product from scratch, and then managing the bill-of-materials and supply chain through production.”

Behind these companies lies even more – the strength of XTG’s parent company, Mouser Electronics, a global authorized distributor of semiconductors and electronics components, recognized as the world leader in the introduction of new products with the widest selection of in-stock products for new designs.

As a wholly-owned subsidiary of TTI Inc., Mouser and XTG are part of the Berkshire Hathaway family of companies.

According to Braemac President Jonathan Mitchell, “The Exponential Technology Group is a great fit for Braemac. Companies within XTG maintain their own areas of expertise and focus while collaborating within the group to deliver new technological solutions globally.”

Exponential Technology Group (XTG) is a collection of companies specializing in designing products and supplying semiconductors and electronic components that enable smart electronic systems in automotive, medical, wireless, industrial, and IoT.

XTG operates as an independent member of Berkshire Hathaway’s Mouser and TTI family of companies.

The companies within the XTG group include the Design Services Companies of BGM Electronic Services, Connected Development, and Paragon Innovations, plus the supply chain experts and specialty semiconductor distributors of RFMW Ltd, Symmetry Electronics, Changnam I.N.T. LTD.

© 2022 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 a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance

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Acquisitions

Berkshire Hathaway Acquires Alleghany Corporation

(BRK.A), (BRK.B)

Berkshire Hathaway and Alleghany Corporation have announced the completion of Berkshire Hathaway’s acquisition of Alleghany.

Holders of Alleghany common stock as of immediately prior to the closing of the transaction are entitled to receive $848.02 per share in cash, representing a total equity value of approximately $11.6 billion.

Upon the closing of the transaction, Alleghany became a wholly-owned subsidiary of Berkshire Hathaway. Alleghany continues to be led by Joe Brandon.

Founded in 1929 by Oris and Mantis Van Sweringen as five railroad systems, the company eventually evolved into a holding company that owns and supports certain operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. The company’s primary sources of revenues and earnings are from reinsurance and insurance operations and investments. The insurers include: Transatlantic Holdings, Inc., RSUI Group, Inc., a leading underwriter of wholesale specialty insurance based in Atlanta, Georgia, and CapSpecialty, Inc., an underwriter of a full inventory of specialty lines, including commercial property, casualty, fidelity, surety and professional lines with a focus on small business on both an admitted and non-admitted basis.

Alleghany also generate revenues and earnings from a diverse portfolio of non-financial businesses that are owned and managed through its wholly-owned subsidiary Alleghany Capital.

© 2022 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 a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is

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Acquisitions

Berkshire Hathaway and Alleghany Receive Regulatory Approvals for Merger

(BRK.A), (BRK.B)

Berkshire Hathaway and Alleghany Corporation have announced that all regulatory approvals relating to the proposed acquisition of Alleghany by Berkshire Hathaway have been received.

As previously announced, the stockholders of Alleghany voted to approve and adopt the Agreement and Plan of Merger, dated as of March 20, 2022, at a special meeting held on June 9, 2022. The completion of the proposed transaction is currently expected to occur on October 19, 2022, subject to the satisfaction of customary closing conditions.

Berkshire Hathaway will acquire all outstanding Alleghany shares for $848.02 per share in cash.

Founded in 1929 by Oris and Mantis Van Sweringen as five railroad systems, Alleghany eventually evolved into a holding company that owns and supports certain operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. The company’s primary sources of revenues and earnings are from reinsurance and insurance operations and investments. The insurers include: Transatlantic Holdings, Inc., RSUI Group, Inc., a leading underwriter of wholesale specialty insurance based in Atlanta, Georgia, and CapSpecialty, Inc., an underwriter of a full inventory of specialty lines, including commercial property, casualty, fidelity, surety and professional lines with a focus on small business on both an admitted and non-admitted basis.

Alleghany also generate revenues and earnings from a diverse portfolio of non-financial businesses that are owned and managed through its wholly-owned subsidiary Alleghany Capital.

© 2022 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 a 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.

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Acquisitions Marmon Group

Berkshire Hathaway’s Precision Edge Surgical Products Acquires Eva-Lution

(BRK.A), (BRK.B)

Berkshire Hathaway’s Precision Edge Surgical Products Company, a manufacturer of orthopedic and medical device instruments, has announced its asset acquisition of Angola, Ind. based Eva-Lution.

Eva-Lution has specialized in the manufacturing of medical instruments since 2015.

“The addition of the Eva-Lution operation will enhance Precision Edge’s continued growth in service to our strategic customers,” says Todd Fewins, Precision Edge president. “The demand is there, and this new site in Angola will provide added capacity, manufacturing equipment, and a talented group of people who deliver high-quality medical products.”

With its manufacturing headquarters located in Sault Ste. Marie, MI, and a second Michigan manufacturing site in Boyne City, Precision Edge has served the medical industry since 1989 by focusing on surgical cutting tools. Precision Edge recognized that most manufacturers focused on the basic design of an instrument, but not the precise cutting edge. The focus at Precision Edge has been, and continues to be, on supporting customers as they develop the most complex designs and provide the most accurate and precise cutting edge on medical tools, while also manufacturing non-cutting instruments.

The acquisition of Eva-Lution’s more than 60,000-square-foot site will support continued growth in a geographical area that is well known for orthopedic original equipment manufacturers (OEMs), as well as accelerate Precision Edge’s implant manufacturing capabilities.

“We are being very intentional in how we grow and where we grow,” says Kenneth Ross, Director of Sales at Precision Edge. “We have many exciting opportunities in our pipeline that will expand our offerings in both technology and services, allowing us to remain a leader in this great industry.”

Precision Edge is a member of Colson Medical, LLC, which is majority a company under the  Marmon Holdings division of Berkshire Hathaway.

© 2022 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 a 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.

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Acquisitions Kraft Heinz

Kraft Heinz Acquires Brazilian Food Company Hemmer

(BRK.A), (BRK.B)

The Kraft Heinz Company, the owner of the Heinz and Quero brands in Brazil, has completed its acquisition of a majority stake in Companhia Hemmer Indústria e Comércio, a Brazilian food company focused on condiments and sauces, after the deal was approved without restriction by CADE (Brazil’s Administrative Council for Economic Defense), Brazil’s antitrust body.

The deal was first announced in September 2021, and CADE was notified in November 2021.

The association with Hemmer, a 107-year-old company based in Blumenau, Santa Catarina, will expand Kraft Heinz’s International Taste Elevation platform with its focus on condiments and sauces and will also support its strategy to increase its presence in emerging markets.

The acquisition aims to accelerate the growth of both companies, whose brands and portfolios are complementary. Hemmer will also benefit from Kraft Heinz’s distribution network and go-to-market model in Brazil, including in the growing foodservice channel.

“This is an important move for our International growth strategy, which is focused on Taste Elevation, our portfolio of high-quality, delicious products that enhance the taste of food,” says Rafael Oliveira, EVP & President, International Markets at Kraft Heinz.

“We are very excited about the completion of the deal, which furthers Kraft Heinz’s plan to become one of the largest food players in the country, expanding our selection for our consumers,” said Fernando Rosa, Managing Director of Brazil at Kraft Heinz. “This combination represents a tremendous growth opportunity for both companies, which are both built on the pillars of tradition, innovation, quality, superior ingredients, and flavor.”

© 2022 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.

Categories
Acquisitions

Berkshire Hathaway Offers $11.6 Billion for Alleghany Corporation

(BRK.A), (BRK.B)

In its first major acquisition of 2022, Berkshire Hathaway has agreed to pay $11.6 Billion for insurance conglomerate Alleghany Corporation.

Berkshire and Alleghany jointly announced they have entered into a definitive agreement under which Berkshire Hathaway will acquire all outstanding Alleghany shares for $848.02 per share in cash.

The transaction, which was unanimously approved by both Boards of Directors, represents a total equity value of approximately $11.6 billion. The acquisition price represents a multiple of 1.26 times Alleghany’s book value at December 31, 2021, a 29% premium to Alleghany’s average stock price over the last 30 days and a 16% premium to Alleghany’s 52-week high closing price.

Founded in 1929 by Oris and Mantis Van Sweringen as five railroad systems, the company eventually evolved into a holding company that owns and supports certain operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. The company’s primary sources of revenues and earnings are from reinsurance and insurance operations and investments. The insurers include: Transatlantic Holdings, Inc., RSUI Group, Inc., a leading underwriter of wholesale specialty insurance based in Atlanta, Georgia, and CapSpecialty, Inc., an underwriter of a full inventory of specialty lines, including commercial property, casualty, fidelity, surety and professional lines with a focus on small business on both an admitted and non-admitted basis.

Alleghany also generates revenues and earnings from a diverse portfolio of non-financial businesses that are owned and managed through its wholly-owned subsidiary Alleghany Capital.

Alleghany Capital’s investments are categorized as either industrial businesses or non-industrial businesses. The industrial businesses are: (i) Precision Cutting Technologies, a holding company focused on the machine tool and consumable cutting tools sectors; (ii) R.C. Tway Company, LLC (dba Kentucky Trailer), a manufacturer of custom trailers and truck bodies for several niche end markets; (iii) WWSC Holdings, LLC, a structural steel fabricator and erector for commercial, industrial, and transportation infrastructure projects; (iv) Wilbert Funeral Services, Inc., a provider of products and services for the funeral and cemetery industries and precast concrete markets; and (v) Piedmont Manufacturing Group, LLC, a provider of injection molded and thermoformed parts and multi-component assemblies for OEM customers in the industrial, commercial, transportation, recreational, and medical end-markets. The non-industrial businesses are (i) IPS-Integrated Project Services, LLC, a global provider of design, engineering, and related services to the biopharmaceutical and life sciences markets and, through its subsidiary Linesight, cost and project management services for clients in the data center, technology, and other sectors; (ii) Jazwares, LLC, a global toy and musical instrument company; and (iii) Concord Hospitality Enterprises Company, LLC, a hotel management and development company.

“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years. Throughout 85 years the Kirby family has created a business that has many similarities to Berkshire Hathaway. I am particularly delighted that I will once again work together with my long-time friend, Joe Brandon,” said Warren E. Buffett, Berkshire Hathaway’s Chairman and Chief Executive Officer.

“My family and I have been significant shareholders of Alleghany for over 85 years and are proud that our ownership will culminate through this compelling transaction with Berkshire Hathaway. Not only does this deal provide substantial and certain value to stockholders, but it provides a rare opportunity to join forces with a like-minded and highly respected investor and business leader,” said Jefferson W. Kirby, Chair of the Alleghany Board of Directors. “Berkshire Hathaway’s support, resources, and expertise will provide added benefits and opportunities for Alleghany and its operating businesses for many years to come.”

“This is a terrific transaction for Alleghany’s owners, businesses, customers, and employees,” said Joseph P. Brandon, Alleghany’s President and Chief Executive Officer. “The value of this transaction reflects the quality of our franchises and is the product of the hard work, persistence, and determination of the Alleghany team over decades. As part of Berkshire Hathaway, which epitomizes our long-term management philosophy, each of Alleghany’s businesses will be exceptionally well positioned to serve its clients and achieve its full potential.”

The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including approval by Alleghany stockholders and receipt of regulatory approvals. Alleghany will continue to operate as an independent subsidiary of Berkshire Hathaway after closing. Mr. Kirby, who controls 2.5% of Alleghany common shares, intends to vote his shares for the transaction.

Under the terms of the definitive merger agreement, Alleghany may actively solicit and consider alternative acquisition proposals during a 25-day “go-shop” period. Alleghany has the right to terminate the merger agreement to accept a superior proposal during the go-shop period, subject to the terms and conditions of the merger agreement. There can be no assurances that the “go-shop” process will result in a superior proposal, and Alleghany does not intend to communicate developments regarding the process unless and until Alleghany’s Board of Directors makes a determination requiring further disclosure.

Goldman Sachs & Co. LLC is serving as financial advisor and Willkie Farr & Gallagher LLP is serving as legal advisor to Alleghany. Munger, Tolles & Olson LLP is serving as legal advisor to Berkshire Hathaway.

Warren Buffett’s Interest in Alleghany

At the Berkshire Hathaway annual meeting on April 30, 2022, Warren Buffett noted that he had been following Alleghany for more than sixty years.

© 2022 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 a 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.

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Acquisitions Marmon Group

Marmon Retail Solutions Acquires Two Companies

(BRK.A), (BRK.B)

Marmon Retail Solutions has acquired Big Red Rooster Flow and Project CSI, effective November 18, 2021. The acquisitions were just announced and the terms were not disclosed.

Together, BRRF and Project CSI are one of the largest providers of end-to-end program management and construction services to the retail fuel, retail drug and quick-serve restaurant channels. Their services include retail site surveys, site branding and remodeling, procurement of all necessary materials for project execution, and overall management of strategic brand programs.

Based in Northfield, Illinois, BRRF uses a proprietary software program that integrates with its customers’ systems to help retailers track programs and manage their brands. Based in Fishers, Indiana, Project CSI manages installation of interior and exterior branding and remodeling programs at retail sites throughout the U.S. using contracted crews. The company also provides ongoing audit services to ensure brand accuracy and overall program execution.

Rob Mead at BRRF and Chris Pratt at Project CSI will continue to lead their respective companies.

“We are excited to have BRRF and Project CSI join our group of companies,” said Jason MacGregor, Group President of Marmon Retail Solutions. “Both have earned outstanding reputations for providing innovative and dependable services. Together, they will significantly bolster the offerings of Marmon Retail Solutions and help us continue to grow in service to our valued customers.”

Marmon Retail Solutions provides retailers and brand marketers worldwide with comprehensive products and services for an array of retail environments. The group includes L.A. Darling, DCI Marketing, Trade Fixtures, Eden, Retail Space Solutions, Commercial Zone, Store Opening Solutions, Unarco Industries, Artform Creative, and Cannon Equipment.

Marmon Retail Solutions is part of Berkshire’s Marmon Holdings, Inc., which comprises 11 groups and more than 100 autonomous businesses with total annual revenue of $10 billion. Marmon’s 20,000-plus team members serve diverse industries and markets worldwide.

© 2022 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.

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Acquisitions Kraft Heinz

Kraft Heinz Finalizes Acquisition of Just Spices

The Kraft Heinz Company has completed its acquisition of an 85% stake in Germany-based Just Spices GmbH.

The remaining 15% ownership stake has been retained by Just Spices’ three founders, who will continue on with the company and focus on driving the business and its international growth.

The proposed deal was first announced on Dec. 10, 2021.

Launched in 2014, Just Spices is an innovative start-up, trailblazing the high-growth taste elevation category with annual sales of approximately €60 million. Its 170-plus product portfolio includes spice blends, salad dressings, easy-to-prepare “In Minutes” blends, and organic offerings for diverse meal occasions ranging from breakfast and light snacks to salads and baking, with a broad range of savory, sweet, classic, and exotic flavors. Just Spices’ growing business sells approximately 70% of its ready-made and one-step spice blends directly to consumers, with its remaining sales through major grocery retailers both in-store and online in Germany, Spain, Austria, and Switzerland.

“In 2021, we announced four acquisitions to further accelerate our growth agenda and our ambition to be No. 1 in taste elevation around the world,” said Rafael Oliveira, EVP & President, International Markets at Kraft Heinz. “These include our acquisition of a majority stake in Just Spices, along with our intention to acquire a majority stake of the outstanding equity interests in Brazilian food company Hemmer, our investment in BR Spices in Brazil, and our acquisition of Assan Foods in Turkey. With Just Spices, we will leverage Kraft Heinz’s scale and agility to accelerate the business in the fast-growing taste elevation market beyond the company’s current German base and its recent market entries in Spain, Austria, and Switzerland. We also see tremendous potential to further strengthen and enhance Kraft Heinz’s own direct-to-consumer operations and go-to-market expansion.”

“We are extremely excited by the expansion opportunity that comes from combining Just Spices’ innovation and brand power with the Kraft Heinz team and the scale and knowledge of international markets they bring to the table,” said Florian Falk, Just Spices CEO and one of the company’s three founders.

© 2022 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.