Categories
Dairy Queen

Hot Phoenix Area to See Blizzard of New Dairy Queen Outlets

(BRK.A), (BRK.B)

Add Phoenix, Arizona to the list of cities that will have an expanded presence for Dairy Queen. Five new DQ Grill & Chill restaurants are planned for the Phoenix metro area.

Locations already opening in the West Valley, and Surprise and Goodyear will be opening by the end of December.

The emphasis on the Phoenix area comes as the city of Surprise ranked number five on a list of fastest growing cities in the United States.

Additional locations will be opening their doors in 2017, including Laveen, which will open in January, and two restaurants in Chandler in March and October.

Other locations are planned in Tempe, Gilbert, Scottsdale, Mesa and Glendale.

All the new Dairy Queen’s will be franchises, in keeping with Dairy Queen’s strategy to avoid company-owned stores. The chain has only three company-owned locations among its over 6,000 locations worldwide.

Other cities and states that have seen the “Fan Food” and frozen treats chain announce big expansion plans include Massachusetts, South Carolina, California, as well as Upstate New York, Chicago, and Knoxville, Tennessee.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 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.

Categories
Acquisitions MiTek

M&M Manufacturing Snaps Up Snappy Company

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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.

Categories
Duracell

Sonoco Products Company Creating Packaging Facility to Support Duracell

(BRK.A), (BRK.B)

Sonoco Products Company, a global provider of packaging products and services, is investing $20 million in a new packaging center that will provide packaging services for Berkshire Hathaway’s battery manufacturer, Duracell.

Sonoco’s Display and Packaging unit will be located in Duracell’s new leased facility in the Atlanta area. Sonoco will install and operate state-of-the-art primary packaging equipment at the new center and provide all packaging materials. In addition, the Company will produce retail merchandising displays which will also be packed out at the same facility.

“This unprecedented go-to-market packaging solution for Duracell is unlike any effort provided in our industry,” said Jack Sanders, Sonoco president and chief executive officer. “Because Sonoco is a solutions company which offers multiple packaging products and services, we are able to meet all of Duracell’s unique packaging and retail merchandising needs.”

Full production is expected in the fourth quarter of 2018. Sonoco’s sales of packaging and services annualized over the five-year contract period are expected to be more than $50 million.

© 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.

Categories
Berkshire Hathaway Energy

Special Report: When Will Berkshire Finally Hit it Big in Natural Gas?

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In November 2015, Berkshire Hathaway Energy’s Australian subsidiary, CalEnergy Resources, drilled a test well in Western Australia in what the company called modestly a “significant gas field.”

The test well heralded a potential profit gusher as it confirmed an enormous gas field that is four trillion cubic feet of gas-in-place “significant.”

First the Facts

Exploration permit EP 408 is located approximately 280 kilometers south of Perth, and covers both the Whicher Range and Wonnerup gas fields. These gas fields have long been known, and were first discovered in 1968 and 1971, respectively. The fields are located in ancient sandstone reservoirs nearly four kilometers underground.

The fields contain an estimated four trillion cubic feet gas-in-place, and Berkshire’s share currently stands at approximately 84%. Other partners include Which Range Energy.

Slow But Steady Progress

Peter Youngs, the Managing Director of CalEnergy Resources Group, which is owned by Berkshire Hathaway Energy, recently updated MazorsEdge on the progress on the development of the gas field.

“We have over 50 years of data from all of the prior activity on the field that we are assimilating and integrating with our well testing results,” Young states. “Parts of our recent well test were encouraging but it has also shown us that we have not yet answered all of the technical issues that might impinge on a commercialization decision and hence the detailed integration work.”

Young anticipates updating stakeholders on the current status of the work and CalEnergy’s next steps towards the end of the second quarter 2017.

So, will 2017 be the year that Berkshire finally gets to profit from the Whicher gas fields? Not likely at the current pace, but 2018 is not so far off.

© 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.

Categories
Berkadia

Berkadia Completes $43 Million Sale for Arizona Multifamily Property

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Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the recent sale of Coronado Villas, a 432-unit multifamily property in Tucson, Arizona. Senior Managing Director Art Wadlund and Associate Director Clint Wadlund of the Tucson office completed the $43 million sale at a price-per-unit of $99,537.

The seller was Prime Residential, based in San Francisco, and the buyer was Oregon-based Tokola Properties.

“Tokola Properties was looking to purchase a quality property in Arizona,” Art Wadlund said. “With apartment occupancy increasing and job growth accelerating in the Tucson area, the buyer recognized the opportunity Coronado Villas presented to be located within a growing multifamily market.”

Built in 1994, Coronado Villas is located at 9225 E. Tanque Verde Road and affords convenient access to Catalina Highway. The one-, two- and three-bedroom units feature a washer/dryer, double-sided wood burning fireplaces and vaulted ceilings in select units. Community amenities include a fitness center, three swimming pools and spas and a clubhouse. Saguaro National Park East is situated four miles from the property, and top employers in the area include Tucson Unified School District and the Arizona National Golf Club.

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.

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.

© 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.

Categories
Marmon Group UTLX

Low Oil Prices Spur More UTLX Permanent Layoffs

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Continued weakness in demand for shipping domestic crude oil has prompted Berkshire Hathaway’s Union Tank Car Co., more commonly referred to as UTLX, to announce major layoffs in Houston, Texas.

UTLX will cut a third of its staff from its facility in northeast Houston.

In a letter to the Texas Workforce Commission, the company stated that it will permanently cut 106 jobs commencing Jan. 20, 2017.

The move is no surprise, as in April 2016 UTLX announced that it would be cutting its tank car production by 50-percent.

At the time, the Berkshire Hathaway-owned company announced that it also planned to lay-off employees at its plant in Alexandria, Louisiana.

© 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.

Categories
Coca-Cola Minority Stock Positions Stock Portfolio

Howard G. Buffett to Step Down from Coca-Cola Board of Directors

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The Board of Directors of The Coca-Cola Company have announced that Howard G. Buffett, 61, will not stand for re-election to the Board at the Company’s Annual Meeting of Shareowners in April 2017.

The move comes as Coca-Cola Company announced that its Board of Directors has approved unanimously the recommendation of Chairman and Chief Executive Officer Muhtar Kent for changes to the company’s senior leadership structure. Under the new structure, company veteran James Quincey, President and Chief Operating Officer, will succeed Kent as CEO, effective May 1, 2017. Kent will continue as Chairman of the Board of Directors.

According to a statement issued by Coca-Cola, Buffett has chosen to retire from the Board to focus more time on his work as Chairman and CEO of the Howard G. Buffett Foundation, which focuses on advancing sustainable agricultural practices and conflict mitigation throughout the world.

“I’ve enjoyed my more than 17 years of combined service to the boards of Coca-Cola Enterprises and The Coca-Cola Company and have the utmost respect and admiration for the work the Company is doing to sustainably grow its business around the world,” Buffett said. “Under the long-time leadership of Chairman and CEO Muhtar Kent, joined recently by President and COO James Quincey, the Company has exciting plans for the future and is poised to deliver even greater value to its many stakeholders in the years to come.”

Buffett joined The Coca-Cola Company’s Board of Directors in December 2010 and has served as a member of the Public Issues and Diversity Review Committee since 2011. From 1993-2004 he served as a director on the Board of Coca-Cola Enterprises, Inc., which at the time was the largest bottler of Coca-Cola beverages in North America and Western Europe.

In addition to his role with the Howard G. Buffett Foundation, Buffett serves as President of Buffett Farms, a commercial farming operation in Nebraska, and, since 1993, has served as a director of Berkshire Hathaway Inc. From 1995 to January 2016, Buffett also served as a director of Lindsay Corporation.

© 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.

Categories
Berkshire Hathaway Energy

Berkshire Sets Sights on Alamo 6 Solar Farm

(BRK.A), (BRK.B)

While some have questioned whether the new Trump administration will change any of Berkshire Hathaway’s renewable energy plans, it doesn’t seem to be affecting their acquisition strategy.

Berkshire Hathaway Energy is reportedly looking to purchase the Alamo 6 solar farm from San Antonio, Texas-based solar developer OCI Solar Power.

OCI Solar Power has filed for state approval of the sale.

The 110-megawatt solar project will supply power to CPS Energy under an already signed agreement.

While Berkshire, has not released a statement, Berkshire’s purchase price is said to be $385 million.

OCI Solar Power is a subsidiary of OCI Company, a Korean chemical and renewable energy company.

Working with Utility-Scale Developers

Berkshire has a strategy of purchasing solar projects from outside developers, including the 579 megawatt Solar Star Projects (formerly Antelope Valley Solar Projects), which are two co-located solar installations in Kern and Los Angeles Counties in California that were purchased from SunPower in 2013. And Berkshire acquired two solar projects from Geronimo Energy in 2015 and 2016.

© 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.

Categories
McLane

McLane Company Awarded 29 More Stores by Mirabito

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Company, Inc., a leading supply chain services company providing grocery and foodservice supply chain solutions throughout the U.S., has been awarded services for 29 Xtra Mart c-store locations recently acquired by Binghamton, New York-based Mirabito Holdings Inc.

As part of the multi-year agreement, McLane will begin servicing the 29 Xtra Mart locations in central New York and Northeast Pennsylvania starting January 1, 2017.

With the addition of the 29 Xtra Mart locations, which will be rebranded as Mirabito c-stores, McLane now handles all of Mirabito’s c-store locations in the eastern region, bringing the total to more than 100 stores.

“Mirabito has had a long standing relationship with McLane Company and have trusted the support of the company’s senior leadership team for over 20 years,” said President and Chief Executive Officer Joe Mirabito. “Their commitment to our future is invaluable and we look forward to a long and successful relationship.”

“McLane Company has been servicing our current stores for 20 years and we are excited that McLane will be servicing our newest addition to the Mirabito Family. McLane has been a critical part of our success and growth. Their commitment to our business, professionalism, customer service, and ability to adapt and develop technology applications aligns with our future growth plans and superior customer shopping experience,” added Chief Operating Officer Rich Mirabito.

A customer of McLane since 1997, Mirabito has stated the supply chain’s strategic leadership, operating excellence, and tech solution offerings as contributors to its growing footprint in the eastern region over the years.

Specifically, through its participation in McLane’s Center for Category Innovation and inclusion of the supply chain’s foodservice solution, McLane Kitchen, Mirabito plans to roll out newly remodeled stores and introduce specialty, fresh and frozen items and equipment starting in 2017.

“Mirabito is a well-respected and a long-time customer of McLane, so it’s an honor they have chosen us to provide services for the acquired Xtra Mart business,” said Tony Frankenberger, president at McLane. “Our portfolio of services will enable Mirabito to provide a wider variety of foodservice offerings and upgraded footprint experience to its rapidly growing customer base.”

© 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.

Categories
Minority Stock Positions Stock Portfolio

BYD to Supply Pure Electric Vehicles to Iran

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Chinese renewable energy technology leader BYD Company has become the first company to supply pure electric vehicles to Iran.

BYD’s strategic partnership with the country’s largest private passenger car manufacturer Kerman khodro will also see the Shenzhen-based company export other leading technological products to Iran including hybrid vehicles, electric commercial vehicles and rechargeable batteries.

“Our partnership with Karmania is an important step in expanding our Middle East operations,” said AD Huang, General Manager of BYD’s Middle East and Africa Auto Sales Division. “Iran’s new energy vehicle market has vast potential because the government of Iran has the foresight of sustainable development. We endeavor to use our excellent technology to provide quality products and service to the people of Iran.”

“We are very positive about the future of new energy vehicles in Iran because of BYD’s mature technology, the scale of its production and operational success,” said Karmania CEO Pooya Salari Sharif. Karmania is a subsidiary of Kerman that specially for BYD.

BYD’s commercial initiatives in the Middle East and Africa presently include energy storage, new energy vehicles and solar power generation.

According to a statement by BYD, Iran is just one of several Middle Eastern countries responding to climate change concerns through various environmentally friendly policies such as tax breaks for new energy vehicles. These initiatives also assist nations in reducing their dependence on fossil fuel.

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 $1.77 billion.

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

© 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.