Categories
Duracell

Berkshire Hathaway Promotes Thom Lachman to CEO of Duracell

(BRK.A), (BRK.B)

Berkshire Hathaway has elevated Thom Lachman to CEO of the Duracell Company, effective January 1, 2018. Roberto (Bobby) Mendez will take over Lachman’s former role, being promoted to President of Duracell North America.

Angelo V. Pantaleo, who served as CEO of the Duracell Company since Berkshire Hathaway’s acquisition of the company was completed in March 2016, has accepted the new position of President & COO of Marmon Holdings, Inc., a Berkshire Hathaway Company. He will also continue to provide oversight as Chairman of the Duracell Company Board of Directors.

Lachman joined Berkshire Hathaway as a member of Berkshire Hathaway’s Duracell Transition Team on November 1, 2015, and has served as Duracell’s President of North America since March 1, 2016.

Before coming to Berkshire Hathaway, Thom gained over 30 years of experience with Procter & Gamble (P&G). His last role as President of P&G Canada was preceded by a role leading the North America integration of the Gillette acquisition. He also served as the Global Marketing Director for PUR Water Filtration. Rounding out Thom’s P&G career is a variety of brand and manufacturing management roles, having earned both his B. S. in Chemical Engineering and his MBA from Tulane University.

“Thom and Bobby are crucial members of the Duracell leadership team,” said Angelo Pantaleo. “We are excited to see them flourish in these new roles and strengthen even further the success of this great company.”

Bobby joined Berkshire Hathaway officially on the date the Duracell acquisition was completed: March 1, 2016, and has served as Duracell’s President of Latin America & OEM business since that time. Prior to coming to Berkshire Hathaway, Bobby enjoyed a career with Procter & Gamble that spanned over 23 years. For the last 6 years of his P&G career, Bobby served as Duracell’s CFO. Before Duracell, Bobby held a number of financial roles including CFO for P&G Mexico, LA HQ Corporate Finance Associate Director, and Group Manager for Puerto Rico/Caribbean Finance. Bobby earned his BSBA in Finance from Georgetown University.

© 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.

Categories
McLane

McLane Company Opens $150 Million Distribution Center

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Berkshire Hathaway’s wholly-owned supply chain services company, McLane Company, Inc., has opened a new, $150 million, 417,338-square-foot grocery distribution center in Findlay, Ohio.

“Of our 80 grocery and foodservice distribution centers nationwide, the Findlay facility is the most technologically advanced combining teammates, state-of-the-art automation, advanced robotics and artificial intelligence,” said Tony Frankenberger, President of McLane Grocery.

The McLane Findlay distribution center will employ approximately 400-500 teammates in Ohio.

Of McLane’s 80 distribution centers nationwide, the massive Findlay facility is the most technologically advanced – utilizing teammates, robotics and artificial intelligence to deliver over 325,000 picks of items per day at peak operation.

Governor John Kasich gave remarks applauding McLane’s decision to locate in Ohio and highlighted the positive impact McLane has on the community. He touched on some of McLane’s inclusive hiring policies stating, “That is a huge, huge deal, when we’re giving everybody a chance.”

The McLane Findlay distribution center will store approximately 16,000 grocery and convenience store items representing over 700 suppliers, which will continue to increase in 2018. Robots utilize bar codes on the products to store and transfer pallets of goods, traveling up to 60 mph to fulfill orders. McLane teammates help control and program the robots and load and organize products into bins based on the products’ final destinations.

These items are then delivered to convenience stores, mass merchants, warehouse clubs and drug stores in Ohio, Michigan, Indiana and Pennsylvania.

“There is an outstanding culture providing a strong workforce place here in Findlay in Hancock County and when I say strong I mean that in the sense of commitment, respect, and teamwork,” said Julie Norris, Division President, McLane Grocery Distribution.

The McLane Findlay distribution center employed 500 construction trade representatives over the facility’s 14-month construction. The company is committed to hiring Ohioans and contributing to the Findlay and Ohio economy. Teammates are relocating to Findlay from Toledo, Lima, Indianapolis and Detroit to work at McLane. In addition, McLane has hired over 95 truck drivers, with plans to hire 75 more.

© 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.

Categories
Commentary

Commentary: What Does Sale of DaVita Medical Group Mean for Berkshire Hathaway?

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The news that health services company Optum is purchasing DaVita Medical Group, a subsidiary of DaVita Inc., for $4.9 billion may bring a windfall for Berkshire Hathaway.

Berkshire has a $2.27 billion stake in DaVita Inc., which works out to roughly 22.03% of the company’s market cap and approximately 23.57% of the institutional ownership, and news of the sale gave Berkshire an immediate paper profit boost of $230 million.

The longer term prospect is good for Berkshire, as well.

According to DaVita, the company plans to use the proceeds from the transaction for significant stock repurchases over the one to two years following the closing of the transaction, as well as to repay debt and for general corporate purposes.

“Following this transaction, DaVita will continue to be a leader in population health management, with a focus on our U.S. and international kidney care businesses,” DaVita CEO Kent Thiry said. “We also expect to pursue other investments in health care services outside of kidney care.

Berkshire has long been rumored to be interested in acquiring DaVita, and entered into a standstill agreement with Davita in May 2014, pledging not purchase more than 25% of the company.

And while Berkshire doesn’t reveal whether Warren Buffett, or his portfolio managers Ted Weschler and Todd Combs, purchased or sold a particular security, the push to acquire shares in DaVita is generally credited to Ted Weschler.

It looks like he was right on this one.

© 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.

Categories
Berkshire Hathaway Energy

Berkshire Hathaway Orders More Vestas Wind Turbines

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Berkshire Hathaway’s MidAmerican Energy has placed orders for 70 MW of V110-2.0 MW turbines for its the Wind XI wind farm in Iowa.

The turbines will be manufactured at Vestas’ four Colorado factories with expected delivery in the second quarter of 2018.

In August 2016, The Iowa Utilities Board approved MidAmerican’s request to invest $3.6 billion to install additional wind turbines in Iowa by year-end 2019.

The project – Wind XI – is the largest economic development project in Iowa’s history.

When the 2,000-megawatt Wind XI project is completed, MidAmerican’s annual renewable energy generation is expected to reach a level that’s equivalent to 89% of our Iowa retail customers’ annual use.

Wind XI will generate an average of approximately $12.5 million per year in property tax payments, $18 million per year in landowner payments, and $48 million per year in state and local expenditures associated with the project.

© 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.

Categories
Minority Stock Positions Stock Portfolio

BYD Pure Electric Buses Now in Okinawa

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A fleet of 10 pure electric buses manufactured by Chinese new energy technology company BYD is now in service on the Japanese island of Okinawa, marking the beginning of the island’s electrified public transportation initiative.

A total of 10 BYD K9 buses now run a shuttle service to and from the Okinawa Naha Port. BYD is the only Chinese automaker to enter the Japanese market, and only with pure electric vehicles.

This is not the first time BYD has delivered its e-buses to Japan. In 2015, five BYD K9 buses started running in the city of Kyoto. This time, Japan placed the additional order to operate the K9 fleet in the historic city of Okinawa, which hosts millions of visitors each year.

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 is now worth roughly $1.8 billion.

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

© 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.

Categories
Berkadia

Berkadia Arranges Nearly $1 billion in Financing

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Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has arranged financing totaling nearly $1 billion for the acquisition of the Beacon multifamily property portfolio.

Managing Directors Laura Cathlina and Sharon Plattner of Berkadia’s Chicago office secured the Freddie Mac loan on behalf of affiliates of Harbor Group International. The deal closed on November 30.

“Our team was pleased to have been given the opportunity to assist Harbor Group International with the financing of this exclusive portfolio that supports their diversified investment strategy,” said Cathlina. “The end result was a creative multi-faceted loan structure which will provide Harbor a significant amount of flexibility for future decision making. Our partners at Freddie Mac did an outstanding job in working with us to structure this transaction.”

The Freddie Mac financing encompasses 16 properties located in Boston, Baltimore, Chicago, Washington D.C. and Philadelphia, which are part of an overall 25 property portfolio. Eleven of the properties were financed with a fixed rate vehicle for over $789 million. The remaining five properties were financed with a floating rate vehicle for over $138 million.

“The acquisition of the Beacon portfolio represents a milestone transaction for Harbor Group International (HGI) as we continue to grow our investment portfolio,” commented T. Richard Litton, Jr., HGI president. “We are very appreciative of Berkadia’s work on our behalf to structure almost $1 billion of Freddie Mac fixed and floating rate debt.”

Since the beginning of 2017, Berkadia’s mortgage banking team has closed over $19 billion in production volume – an increase of 22 percent compared to the previous year. In 2016, Berkadia’s loan origination volume was $20 billion, ranking first with U.S. Department of Housing and Urban Development, second with Freddie Mac and fourth with Fannie Mae in delivered loan volume.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, 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. In 2016, Berkadia’s loan origination volume was $20 billion, ranking first with U.S. Department of Housing and Urban Development, second with Freddie Mac and fourth with Fannie Mae in delivered loan volume—the only lender in the top four for all three organizations.

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.

© 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.

Categories
Brooks

Brooks Uses 3D Foot Scanning, Biometric Data to Create Uniquely Personalized Running Shoes

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Berkshire Hathaway’s Brooks Running Company is partnering with HP Inc. and Superfeet to deliver the most personalized running footwear.

Leveraging FitStation powered by HP and Brooks Run Signature, Brooks will introduce the first performance running shoe created based on an individual’s unique biomechanics which will be available via special order through select retail partners beginning June 2018.

FitStation is pioneering hardware and software that combines 3D foot scanning with dynamic gait analysis and foot pressure measurements. Fully aligned with principles from Brooks Run Signature, FitStation offers customers in-depth analysis including key motion zones to identify the unique motion path of the runner’s body and information about the desired running experience. FitStation creates a one-of-a-kind holistic digital profile of an individual that combines personalized fit, biomechanics and experience.

With a singular focus on running, Brooks has a deep understanding of runners’ unique biomechanics and is committed to providing personalized experiences that enhance the run for every individual. Based on years of research, the company developed its Run Signature philosophy rooted in the belief that the best way to enhance comfort and improve performance is not to fix a runner’s “flaws” but to instead create running footwear that works with the runner’s natural motion path of his or her body. Through its partnership with HP and Superfeet, Brooks takes Run Signature to the next level and delivers the most personalized running footwear.

“Brooks is committed to providing the fit, feel and ride each runner wants. The ability to give an individual a personalized shoe based on his or her unique biomechanics is a game changer. It is a compelling offering for the runner who is interested in tip-of-the-spear technology and a totally tuned experience,” said Brooks CEO Jim Weber. “As part of our focus on reinventing performance running, we will continue to push the envelope to bring runners innovations that help them uniquely tailor their run.”

“FitStation by HP is changing what personalization means—from the in-store experience to the final product. In collaboration with Brooks and Superfeet, we are delivering truly made-to-measure footwear with a lot size of one,” said Ed Ponomarev, general manager of FitStation and business development HP Inc. “Digitalization of biometric data opens an opportunity to ultimate individualization with the speed and cost efficiency of mass production. HP brings deep experience in computing, scanning and technology integration at scale to deliver a revolutionary digital manufacturing platform, creating individualized products that are available to anyone—from casual runners to elite athletes.”

The FitStation analysis translates into specific requirements for each shoe, and is then produced by Superfeet on a state-of-the-art DESMA polyurethane injection-molding machine. The system uses the 3D foot scans to determine the proper lasts which the shoes are built around, ensuring each shoe is tailored to the specific shape of the runner’s foot. Then, using a combination of variable PU injection with direct attach capabilities, the foot pressure measurements, movement analysis of the runner’s joints, and their personal experience preferences are combined to create personalized midsole requirements with multiple tuned zones—all ensuring the runner stays in their preferred motion path and receives the running experience they desire. All personalized footwear will be manufactured in the U.S. at Superfeet’s world headquarters in Ferndale, Washington.

“Having the leader in running footwear leverage FitStation and our U.S. manufacturing facilities to create the most individualized running shoe on the market is momentous,” said John Rauvola, president and CEO of Superfeet. “Not only will it change what people expect from their running experience, it is also an important step in making a positive difference in people’s lives by delivering the best underfoot support possible. This is the beginning of the individualized fit revolution.”

© 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.
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Categories
Minority Stock Positions Stock Portfolio

BYD Wins Innovation Award

(BRK.A), (BRK.B)

China’s BYD Co. Ltd., the world’s leading supplier of rechargeable lithium batteries, has received an industry award for its high voltage lithium storage system B-Box HV. The versatile concept and its features for high efficiency have been recognized by the industry experts on a jury panel from pv magazine award 2017 for top innovation.

BYD’s B-Box HV drives progress in three categories: with the modularity, the charging and discharging performance and the efficiency. The efficiency had also been tested in a recent storage system performance test and could show impressive results, surpassing the competition.

The B-Box HV lithium storage system was launched in spring 2017 and employs the successful modular design of the B-Box series with battery capacities ranging from 6.4 to 11.5 kWh, providing more than enough energy for the average household and can be scaled up to 57.5kWh for light commercial. The B-Box features excellent efficiency, delivering higher capacity for the best return on investment. The system supports constant 1C and 2C peak charge and discharge rates, and provides best in class useable capacity ratios. As a result it can support household electric devices longer with more power. An innovative connection system allows for an extremely easy plug-and-play installation without the need to connect cables.

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 is now worth roughly $1.8 billion.

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

© 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.

Categories
Berkadia

Berkadia Names New Head of Mortgage Banking

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Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the addition of prominent industry veteran Hilary Provinse as Executive Vice President and Head of Mortgage Banking. She will oversee a team of 130 experienced mortgage bankers located in 31 offices across the country. Ms. Provinse will be a member of Berkadia’s Management Committee and report to Ernie Katai, Executive Vice President and Head of Production. She joins Berkadia from Fannie Mae after a 15-year career, where she most recently served as Senior Vice President and Head of Multifamily Customer Engagement.

“We are extremely fortunate to have Hilary join the Berkadia team,” said Berkadia CEO Justin Wheeler. “With more than 20 years of experience and leadership in CRE capital markets, she is a dynamic leader and forward thinker. Her positive energy and relentless drive to perfect the customer experience will continue to push our platform to new levels. A talent of her caliber is an incredible addition.”

Most recently at Fannie Mae, Provinse led a team of 85 professionals in offices across the country, overseeing all of Fannie Mae’s multifamily debt lending activities and customer engagement. She oversaw Fannie Mae’s transformation to a relationship-based, customer-centric sales organization and led the multifamily production team to double their production volume over a four-year period.

“I could not be more excited to join Berkadia, a client-first organization that provides holistic commercial real estate solutions through its integrated mortgage banking, investment sales and servicing platform,” said Ms. Provinse. “While at Fannie Mae, I saw Berkadia investing in its people and culture and focusing on innovation, process and technology to grow its mortgage banking footprint exponentially to better serve customers, and I’m thrilled to have the opportunity to build upon that success.”

Prior to her tenure at Fannie Mae, Ms. Provinse spent nearly a decade on Wall Street in investment banking and fixed income trading at Goldman Sachs and Bear Stearns. She earned a Bachelor’s degree from Dartmouth College and a Master of Business Administration degree from Northwestern University’s J.L. Kellogg Graduate School of Management.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, 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. In 2016, Berkadia’s loan origination volume was $20 billion, ranking first with U.S. Department of Housing and Urban Development, second with Freddie Mac and fourth with Fannie Mae in delivered loan volume—the only lender in the top four for all three organizations.

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.

© 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.

Categories
LiquidPower

LiquidPower Specialty Products Opens New Manufacturing Plant

(BRK.A), (BRK.B)

Berkshire Hathaway’s LiquidPower Specialty Products Inc. (LSPI), has opened a new drag reducing agent (DRA) manufacturing plant.

Berkshire Hathaway acquired the company in 2014, and it was previously known as ConocoPhilips Specialty Products.

The second facility, located within LSPI’s manufacturing complex in Bryan, Texas, doubles LSPI’s capacity and ensures that LSPI continues to meet growing global demand and maintain its global leadership position.

“With this significant expansion, LSPI is well-positioned to continue its strong history of growth, supply reliability and quality manufacturing. We are fortunate to have long-term commercial relationships with industry leaders and we are confident that our expanded capabilities will allow us to continue to meet the needs of our customers and remain the global leader in the DRA market,” said Mike Brown, CEO and President of LSPI.

LSPI’s two independent manufacturing facilities on the same complex offer production-supply reliability through redundancy and significant economies of scale. Each facility will maintain its own day-to-day operational staff, producing DRA from raw material to finished product. While quality control labs are located within each manufacturing plant, the same quality management team will oversee both facilities to ensure consistently high quality. Both manufacturing plants will also be managed under LSPI’s rigorous HSE programs. The new facility will be supported by our existing robust global supply chain network, providing supply flexibility and agility for delivery for our customers around the world.

LSPI specializes in maximizing the flow potential of hydrocarbon pipelines by increasing operational flexibility and throughput capacity while substantially increasing bottom-line profit for its customers. LSPI’s technology, developed in the 1970s, uses DRA to lower frictional energy loss by reducing turbulence in the pipeline. This technology allows pipeline operators to increase throughput and reduce energy costs while limiting capital investment.

Since inception, LSPI has continued to develop innovative solutions, working with customers in over 40 countries on 6 continents, and treating tens of millions of barrels of hydrocarbon liquids per day. LSPI has the most extensive DRA patent portfolio in the world with 57 granted US patents, numerous patents pending, as well as a significant international patent portfolio. LSPI’s portfolio of application-specific flow improvers offers reliable DRA performance and maximum profitability.

LSPI’s DRA offering is part of a comprehensive, full-service solution that encompasses industry-leading technology, quality manufacturing, experienced technical support and consulting, reliable supply chain, and injection equipment and field service. The new facility is one of many efforts undertaken by LSPI to ensure that our customers continue to receive best-in-class DRA service.

© 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.