Category: Acquisitions

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Acquisitions Berkshire Hathaway Energy

Berkshire Hathaway Renewables Acquires Iowa Wind Farm

(BRK.A), (BRK.B)

BHE Renewables, a subsidiary of Berkshire Hathaway Energy, has completed the acquisition of the 54-megawatt Independence wind energy project from RPM Access LLC, a small regional developer of utility grade wind generation projects in the Midwest.

Located near Ryan, Iowa, the project consists of 18 GE 2.8-megawatt wind turbines and two GE 2.3-megawatt wind turbines and will be completed in fourth quarter 2021. The project will serve Central Iowa Power Cooperative under a 20-year power purchase agreement signed in 2020 by RPM Access.

“The addition of the Independence wind project grows our wind energy portfolio to 1,719 megawatts and provides another opportunity for us to meet the growing demand for energy generated from renewable resources,” said Alicia Knapp, president and CEO of BHE Renewables. “We are excited about this project and look forward to finding more opportunities to own and operate renewable energy resources that support a cleaner energy future.”

BHE Renewables other wind projects include the 300-megawatt Jumbo Road project near Hereford, Texas; 168-megawatt Pinyon Pines I and 132-megawatt Pinyon Pines II projects, located near Tehachapi, California; 81-megawatt Bishop Hill II project in Henry County, Illinois; 400-megawatt Grande Prairie project in Holt County, Nebraska; 72-megawatt Marshall project in Marshall County, Kansas; 212-megawatt Walnut Ridge project in Bureau County, Illinois; and the 300-megawatt Santa Rita wind project in Reagan and Irion counties in west-central Texas.

© 2021 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 Clayton Homes

Clayton Homes Acquires Its 11th Site-Builder Company

(BRK.A), (BRK.B)

Berkshire Hathaway’s Clayton Homes has continued to expand its footprint in the site-built homes market with the acquisition of a site-building company in the Boise, Idaho metro area.

Summit Homes, a subsidiary of Berkshire’s Clayton Properties Group, has acquired Berkeley Building Co., a top residential home builder and developer based in Meridian, Idaho. The acquisition took place on May 3.

Berkeley will continue to operate under the Berkeley Building Co. brand name in its current new home communities in Boise metro, with Joe Atalla, Founder, overseeing operations. Heather Atalla will continue as Berkeley’s Founder/CFO and Jenna Englund will maintain her role as President of Berkeley, as well as the other members of their team. The addition of Berkeley will allow Summit to expand its new home footprint into Idaho as well as provide an entry into the Boise new home market.

“We are thrilled to expand into the Boise market and welcome Berkeley to the Summit family,” said Fred Delibero, CEO of Summit Homes. “It was clear that both companies share very similar core values and cultural alignment. We are both focused on providing a high-level of customer experience to our new home buyers.”

Joe Atalla launched Berkeley Building Co. in 2008 in Boise, Idaho. Berkeley currently builds in seven new home communities in the Boise market. The new home builder is also known for its commitment to charitable giving and has been a longtime supporter of St. Jude Research Hospital through its building of the St. Jude Dream Home for over a decade.

“We are excited for the opportunity to not only partner with Summit Homes and join Clayton Properties Group, but to also join the Berkshire Hathaway family,” said Joe Atalla. “Joining forces just makes sense as we are all working toward common goals: to provide a first-class homebuilding experience and provide extraordinary resources to our team members to grow and develop, both of which will be enhanced through this partnership.”

“Berkeley’s success as a builder is an impressive testament to their passion, talent and values. They have developed an outstanding team that builds exceptional homes while upholding the experience as their top priority,” said Delibero. “We could not be more excited about the future and the opportunities this will bring our buyers and team members.”

Berkeley Building Co. is the eleventh site-builder that Clayton Homes has acquired since it first started adding site-builders in 2016.

Acquired by Berkshire Hathaway in 2003 for $1.7 billion, Clayton Homes has grown into a diverse builder offering traditional site-built homes, modular homes, manufactured homes, tiny homes, college dormitories, military barracks and apartments.

© 2021 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

Categories
Acquisitions GEICO Insurance

GEICO Makes Insurance Acquisitions

(BRK.A), (BRK.B)

Berkshire Hathaway’s auto insurer, GEICO, has acquired Republic Group No. Two Company, a Missouri corporation formed in 1965.The transaction took place in January 2021.

GEICO acquired 100% of the voting shares of Republic Group No. Two Company and control of Southern County Mutual Insurance Co., a property and casualty insurer based in Dallas, Texas.

GEICO management has indicated its intention to reinsure Southern County 100% to an affiliate; however, the reinsurance agreement has not yet been put into effect.

© 2021 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 n

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Acquisitions Pilot Flying J

Berkshire’s Pilot Company Innovates With “Welcome to Pilot”

(BRK.A), (BRK.B)

In 2017, Berkshire Hathaway took a 38.6% stake in the largest operator of truck stops and rest stops in North America, Pilot Company. The company has 750 locations under the Pilot and Flying J brands.

Berkshire is purchasing its equity position from the Haslam family, the company’s founders, and is progressing towards a majority ownership of Pilot by 2024.

Jimmy Haslam, the son of the company’s founder Haslam, will remain in charge when the acquisition is completed.

In acquiring companies, Berkshire is always looking for dedicated management that will bring the same passion and drive to a company even after they no longer own a majority interest. That certainly is happening at Pilot, as the company looks to innovate the customer experience in a rapidly changing marketplace with its “Welcome to Pilot” initiative.

Recently, key marketing personnel at Pilot detailed how they are evolving Pilot’s stores with an emphasis on cashless and contactless transactions, and the overall enhancement of the customer experience.

You can hear all about Pilot’s prototype stores and innovations in “How Pilot is Changing Its Store Experience” on the At Your Convenience podcast that brings you the inside scoop on the convenience store business.

© 2021 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 Energy

Berkshire Hathaway to Take Over Major Stake in North Sea Gas Project

(BRK.A), (BRK.B)

Berkshire Hathaway looks to be one of the beneficiaries of the withdrawal of Dana Petroleum from a major North Sea gas project called Platypus.

The Playtpus project has been estimated to have mid-case recoverable reserves of 105 billion cubic feet of natural gas.

Currently, CalEnergy Resources, a subsidiary of Berkshire Hathaway Energy, has a 26% stake in the project, and Parkmead Group has a 15% stake. Both companies would assume Dana’s interest, with Parkmead Group taking over the role of operator from Dana.

Dana Petroleum is a wholly-owned subsidiary of Korea National Oil Corporation.

Berkshire Hathaway recently increased its natural gas distribution holdings in the U.S. with its acquisition of Dominion Energy’s natural gas transmission and storage business.

CalEnergy, and its predecessor companies, have been active in oil and gas since the 1970s, and engages in exploration through appraisal, development, production and pipeline operations.

© 2021 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 Berkadia

Berkadia Acquires Moran & Company

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has acquired the apartment brokerage practice of Moran & Company, expanding Berkadia’s core capabilities to include an enhanced focus on institutional investment sales.

The partnership will launch Berkadia Institutional Solutions, powered by Moran, a platform dedicated to serving institutional investors nationally through Berkadia’s robust suite of services and resources combined with Moran’s strong institutional investor relationships, built on trust, client service and collaboration.

“This is a tremendous day not just for the Berkadia and Moran teams, but most importantly for our clients—the primary focus in everything we do,” said Berkadia CEO Justin Wheeler. “We remain optimistic about the future of multifamily and are committed to building the most robust CRE platform in the country, powered by the best talent in our industry. There’s no team more experienced or respected in the institutional sales space than Moran.

Together, we will transform apartment institutional investment sales nationally, offering our clients industry leading advice, resources and support to create new opportunities and better outcomes for long-term success.”

Moran Co-Chairman Mary Ann King will be joining Berkadia as Co-Head of Investment Sales and Head of Berkadia Institutional Solutions, powered by Moran, working together with Keith Misner, SVP and now Co-Head of Investments Sales, to lead the integration of the entire 31-member Moran team, including 15 dedicated institutional sales advisors, into Berkadia.

The commercial real estate industry has witnessed record-breaking private real estate equity fundraising in the past few years, with $83 billion raised in 2019 and $23 billion through June 2020 according to Preqin. The sector continues to gain favor with investors as it provides an opportunity to hedge risk and enhance portfolio diversification. Multifamily real estate in particular has demonstrated impressive resilience, coupled with long-term income growth and liquidity characteristics, generating attractive risk-adjusted returns over the past 25 years according to the NCREIF Property Index (NPI).

Moran’s 25-year legacy in multifamily investment sales, with a specialized focus on institutional investors, will complement Berkadia’s existing investment sales, mortgage banking and servicing platforms, delivering greater access to fully integrated commercial real estate solutions.

“At Moran, we’re incredibly proud of our legacy, but always thinking ahead to how we can better anticipate—and answer—our clients’ long-term needs. In joining Berkadia, we’re doing just that,” said Thomas F. Moran, Founder and Co-Chairman of Moran & Company. “Like us, Berkadia is privately-owned and shares our client-centric and collaborative mindset, our focus on people, and our commitment to integrity and excellence.”

“Moran’s team culture and client-focused approach has enabled us to build one of the best apartment institutional sales platforms in the business,” said King. “Now, as Berkadia Institutional Solutions, powered by Moran, we’ll truly be a fully integrated platform with a national presence for our clients, providing them with actionable insights, industry expertise and technology, supported by a full suite of capital markets resources, to maximize their long-term success. We’re energized and excited to move forward together at Berkadia and execute our shared vision for the future.”

In the past two years, Berkadia has executed several other strategic acquisitions aimed at broadening the firm’s depth of expertise and enhancing the firm’s comprehensive offerings, including the:

• Acquisition of Central Park Capital Partners, which launched Berkadia’s Joint Venture Equity & Structured Capital Group;

• Addition of a tax credit syndication and advisory platform with the integration of Riverside Capital into Berkadia Affordable; and

• Acquisition of LIHTC Advisors, a brokerage firm dedicated to providing full-service solutions for apartment investors and focusing on Low Income Housing Tax Credit (LIHTC) and other affordable housing properties.

Additionally, the organization has attracted elite talent across the country, including New York City, Boston, Chicago, Houston, Philadelphia, Dallas, Seattle, Indianapolis, Denver, St. Louis, Southern California, Orlando, Richmond and Birmingham, and within specialty categories, such as Affordable Housing, Hotels & Hospitality, HUD and Student Housing.

Berkshire and 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.

© 2021 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 Benjamin Moore

Benjamin Moore Acquires UK-Based Shaw Paints

(BRK.A), (BRK.B)

Something that Warren Buffett is always fond of are bolt-on acquisitions that bolster Berkshire Hathaway’s existing companies. To that end, Benjamin Moore & Co. has acquired its United Kingdom distribution partner, Shaw Paints Ltd.

Prior to this transaction, Shaw Paints Ltd was the exclusive UK distributor of Benjamin Moore premium quality products and expansive color offerings to consumers, designers and professionals alike. Effective immediately, industry veterans and Shaw Paints co-founders, Craig and Helen Shaw, will join the Benjamin Moore team and remain based in the UK.

With this acquisition, Shaw Paints Ltd will become Benjamin Moore UK, in an effort to accelerate the brand’s growth in the United Kingdom.

The newly formed Benjamin Moore UK will continue to operate showrooms in Slough, Chelsea and Wilmslow, as well as fulfillment to a network of authorized stockists throughout the market.

“We’re thrilled to formally incorporate Shaw Paints Ltd into our international sales operations as they’ve been a trusted partner these past five years,” said Dan Calkins, Benjamin Moore Chairman & CEO. “With their sterling track record, this will enable Benjamin Moore to increase scale throughout the region and offer our best-in-class products to more UK customers.”

“The Benjamin Moore brand has been exceptionally well received in the UK market since the launch in 2015 and we have experienced strong growth as a result of our strategic partnership with Benjamin Moore,” said Craig Shaw, Shaw Paints Ltd Co-Founder. “We’re proud of the business we operate in the United Kingdom and through this acquisition, we expect to further accelerate growth with our industry-leading products and unparalleled color offerings.”

© 2020 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 Energy

Berkshire Hathaway Energy Completes Acquisition of Majority of Dominion Energy’s Gas Transmission and Storage Business

(BRK.A), (BRK.B)

Berkshire Hathaway Energy has completed the purchase of Dominion Energy’s natural gas transmission and storage business, exclusive of Questar Pipeline Group.

The transaction consideration was $8 billion, including approximately $2.7 billion in cash (subject to certain adjustments) and the assumption of approximately $5.3 billion in debt.

The completed transaction also included the acquisition of 25% of Cove Point LNG – an LNG export, import and storage facility in Maryland that Berkshire Hathaway Energy will now operate. The transaction received antitrust clearance under the Hart-Scott-Rodino Act from the Federal Trade Commission in October 2020, and approval to transfer existing licenses from the Federal Communications Commission and Department of Energy earlier this year.

“We are pleased to welcome the natural gas transmission and storage business and its employees to Berkshire Hathaway Energy,” said Greg Abel, Berkshire Hathaway’s vice chairman, non-insurance operations, and Berkshire Hathaway Energy chairman. “With shared values and priorities, the business is a great fit within our organization and will play an important role in our long-term plan to deliver clean, low-cost and sustainable energy solutions to customers and communities.”

On July 5, 2020, Berkshire Hathaway Energy announced it had reached an agreement to acquire substantially all of Dominion Energy’s gas transmission and storage operating segment assets. On September 30, 2020, Dominion Energy announced a dual-phase closing for the transaction as a result of updated timing expectations for receipt of the antitrust clearance from the Federal Trade Commission related exclusively to the sale of Questar Pipeline Group.

On October 5, 2020, the companies entered into a second agreement providing for Berkshire Hathaway Energy’s purchase of Questar Pipeline Group from Dominion Energy Questar Corporation. The second transaction is subject to regulatory approvals and is expected to close in early 2021.

© 2020 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 Marmon Group

Berkshire Hathaway Acquires Tenn-Tex Plastics

(BRK.A), (BRK.B)

Berkshire Hathaway’s Marmon Fastener Group has announced the acquisition of Tenn-Tex Plastics Inc., adding it to its lineup of construction fastener companies. No financial terms of the deal were released.

Based in Colfax, North Carolina, Tenn-Tex manufactures plastic injection molded parts for kitchen and bath cabinetry.

The company’s products include: speciality drawer slide brackets designed for easy installation, a patented QuikTray Rollout System, Shelf Clips, Shelf Supports, Institutional Shelf Supports, Corner Braces, Glue Blocks, False Front Clips, Glass Door Retainers, Slide Brackets for Undermount and Side Mount Slides, Brackets for Ball Bearing Slides, Cover Caps, Shipping Clips, Spacers, Inset brackets, Toe Kick Endcaps, Paint Caps, Furniture Glides and much more.

“Tenn-Tex is a great fit for the Marmon Fastener Group as we grow and innovate in both existing and adjacent markets to meet customer needs,” said Group President Steve Semmler. “Tenn-Tex is particularly well aligned with Pan American Screw.”

“We look forward to growing in service to our customers and markets through the excellent synergy of Pan American / Deerwood Fasteners and Tenn-Tex,” said Pan American President Phil Lail.

© 2020 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 Berkadia

Berkadia Acquires LIHTC Advisors Brokerage

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has acquired LIHTC Advisors, an Idaho-based brokerage firm dedicated to providing full-service solutions for apartment investors and focusing on Low Income Housing Tax Credit (LIHTC) and other affordable housing properties.

Leading this team will be Jeff Irish and Brandon Grisham, former principals with LIHTC Advisors who, prior to joining Berkadia, have been involved in the sale of over $2 billion of affordable housing assets throughout the country.

The addition of LIHTC Advisors will broaden Berkadia Affordable’s market presence and support long-term strategic growth under the leadership of David Leopold, SVP and Head of Berkadia Affordable.

Irish and Grisham have been in the affordable housing brokerage business for a combined 19 years representing both general and limited partners. In 2019, they closed 53 transactions—and expect to exceed that in 2020.

“This is a huge step forward in Berkadia’s goal of expanding our affordable housing team, another investment in this critical space,” said Berkadia CEO Justin Wheeler. “Jeff, Brandon and their team bring a long and successful record of providing excellent advisory and client service—what Berkadia is known for in this asset class and in our industry.”

This investment advances Berkadia’s strategic growth initiative in the affordable business. David Leopold joined as SVP and Head of Berkadia Affordable in 2019. Leopold leads the strategy of Berkadia Affordable’s Mortgage Banking, Investment Sales and recently integrated Tax Credit Syndication teams, which together deliver comprehensive capital and advisory services to support the growth of Berkadia’s affordable housing clients.

“We are thrilled to be adding such skilled affordable experts to further our goal to be the largest and most respected provider of capital and advisory services for affordable housing in the country,” said Leopold. “Jeff, Brandon and their entire team bring our suite of services and market presence to a new level, partnering with our clients to maximize the value and impact of their investments.”

“Joining the Berkadia team was an easy choice—our values of hard work, integrity and passion align with theirs, along with the promise to deliver exceptional client service,” said Grisham. Joining Irish and Grisham on the move is a team of brokers and technical experts dedicated to providing best in class analysis, marketing and sales execution.

In 2019, Berkadia’s loan origination volume was $27 billion, while its investment sales platform totaled $9 billion.

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.

© 2020 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.