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Berkshire Hathaway Energy

Topaz Solar Farm Shines as One of World’s Largest

(BRK.A), (BRK.B)

Berkshire Hathaway Energy’s Topaz Solar Farm in San Luis Obispo County, California, is now one of the largest photovoltaic solar farms in the world.

The plant went substantially on line in 2014, providing power to Pacific Gas and Electric Company’s customers in California under a long term power purchase agreement.

The 550 megawatt solar plant was built by First Solar for Berkshire subsidiary BHE Renewables, and produces enough power to supply the needs of 181,000 average-sized California homes. BHE Renewables completed the acquisition of Topaz Solar Farms from First Solar in January 2012.

Worldwide, First Solar has built over 10 gigawatts of installed solar power to date.

Topaz Solar Farm uses 8.4 million First Solar advanced thin-film photovoltaic modules that generate electricity without emissions, waste or water use. First Solar claims the technology has the smallest carbon footprint of any photovoltaic technology.

A host of Environmental Benefits

The solar plant was built on previously disturbed agricultural land, and provides additional environmental benefits as well as clean power.

“Topaz functions as a productive grassland habitat for native plants and animals — some of which are endangered and protected — while being used for passive farming of the sun’s energy,” said Bill Fehrman, president of BHE Renewables.

According to the company, “BHE Renewables provided wildlife mitigation corridors throughout the project and protected more than 17,000 acres of surrounding land as native species habitat.”

California, Land of Renewable Energy

Solar power is playing a big part in California’s ambitious renewable energy plans.

On November 17, 2008, Governor Arnold Schwarzenegger signed Executive Order S-14-08 requiring that “retail sellers of electricity shall serve 33 percent of their load with renewable energy by 2020.”

Decreasing Cost of Construction

The cost of producing solar power is declining rapidly. According to PV Magazine, the cost of producing solar power fell 60% in just an 18 month period, and the overall cost of producing solar power in 2013 was 60% cheaper than in 2011.

Low Cost of Operation

According to First Solar, its Cadmium Telluride (CdTe) thin film technology has the lowest energy pricing on a total cost basis.

“Total cost of electricity pricing includes the levelized cost of electricity (LCOE) and economic externalities such as environmental impacts. With the smallest carbon footprint, fastest energy payback time, and lowest life cycle water use, CdTe PV has the lowest externalities of all solar and conventional energy technologies, resulting in the lowest energy price on a total cost basis.”

Another of the advantages of photovoltaic power production is its low cost of ongoing operation. BHE Renewables’s comparably sized Solar Star I and 2 projects, in Rosamond, California, only have 15 full-time site positions to run the entire facility.

About BHE Renewables

A subsidiary of Berkshire Hathaway Energy, BHE Renewables has 3,470 megawatts of renewable energy owned or under construction in 6 states, and runs BHE Solar, BHE Wind, BHE Geothermal, and BHE Hydro. The company also operates and maintains a power plant on the Philippine island of Luzon.

© 2015 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 Lubrizol

Is Axalta Coating Systems in Berkshire’s Crosshairs?

(BRK.A), (BRK.B)

Could a former DuPont unit be an acquisition target for Berkshire Hathaway’s Lubrizol Corporation?

Berkshire Hathaway has acquired a minority stake in Axalta Coating Systems (AXTA), a leading global coatings company “dedicated solely to the development, manufacture and sale of liquid and powder coatings.”

In a statement released by Axalta, “an affiliate of Berkshire Hathaway Inc. (“Berkshire Hathaway”) has entered into a definitive stock purchase agreement with certain affiliates of The Carlyle Group (“Carlyle”) for the purchase of a total of 20 million of Axalta’s common shares for an aggregate purchase price of $560 million, or $28.00 per share. Axalta will not receive proceeds from the sale of the shares. In connection with the purchase, Berkshire Hathaway agreed that it would not dispose of the shares for 90 days following the consummation of the sale. Axalta has agreed to provide Berkshire Hathaway with certain registration rights following the expiration of that 90-day period.”

The $28 share price is substantially below the $31.30 share price that Axalta was trading at after the announcement.

A Leader in Specialty Coatings

Headquartered in Philadelphia, Axalta is a worldwide leader in development and manufacture of specialty coatings.

The company lists the following facts on its website:

• More than 12,000 people who create, manufacture, distribute and support our products and services
• Doing business in 130 countries
• 35 manufacturing plants around the world
• 7 Research & Development centers on four continents
• Over 1,800 patents held or pending
• 45 training centers to support our refinish customers around the globe
• More than 120,000 customers including 4,000 distributors
• 2013 revenues of $4.3 billion

The company was founded in 1866 as Herberts, the original producer of Standox® paint products. Spun off of DuPont Performance Coatings in 2013, it was sold to the Carlyle Group and renamed Axalta Coating Systems. Today the company is a leader in coatings for commercial vehicles.

In Lubrizol’s Crosshairs?

While Berkshire has not formally announced the affiliate that acquired the Axalta stake, it would seem to be good fit for specialty chemicals manufacturer Lubrizol Corporation.

Lubrizol has been on an acquisition spree lately. In December 2013, Lubrizol acquired pipeline chemical maker Phillips 66 from ConocoPhillips. It was rechristened Lubrizol Specialty Products, Inc. In 2014, it acquired Warwick Chemicals, and Engineered Chemistry and Integrity Industries.

The Carlyle Group remains Axalta’s largest shareholder, with 150.3 million shares, and the question has to be whether the Berkshire stake is a prelude to Berkshire’s acquisition of Axalta as a subsidiary of Lubrizol?

© 2015 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 Automotive

Berkshire Hathaway Automotive Starts Hunt for More Dealerships

(BRK.A), (BRK.B)

With the completion of Berkshire Hathaway’s $4.1 billion acquisition of the Van Tuyl Group, the largest privately owned auto dealership group in the U.S., the newly rechristened Berkshire Hathaway Automotive has already begun its acquisition of additional auto dealers.

Frank Kent Honda of Fort Worth, Texas, is the first to be purchased by BHA.

The business will be renamed Honda of Fort Worth.

The dealership, which was one of the oldest family-owned dealerships in Texas, features an $18 million new Honda showroom that was built in 2010.

Frank Kent Honda had been owned since 2005 by Will Churchill and Corrie Watson, who are great-grandchildren of dealership founder Frank Kent.

In making its first acquisition, BHA is competing in a red hot market that is quickly consolidating.

Investor George Soros, through his Soros Fund Management, has stated that the he is actively looking to purchase a large auto dealership group.

As for Warren Buffett, this is just a beginning that will surely see Berkshire moving up in market share from its current starting point in fifth place.

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

© 2015 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
BNSF

BNSF Sees Benefits From High-Speed Passenger Rail Initiative

(BRK.A), (BRK.B)

High-Speed Intercity Passenger Rail funds currently being invested to bring higher speed passenger rail service in the Pacific Northwest will also bring benefits to BNSF’s freight hauling capacity.

Under the American Recovery and Reinvestment Act (ARRA), a 467-mile rail corridor between Eugene, Oregon and Vancouver, B.C., is being upgraded in order to bring improved passenger rail service for Amtrak’s Cascades service.

In addition to speeding up passenger service, BNSF, which owns the track in the rail corridor, will benefit from the upgrades as well.

The goal of the upgrades is to provide faster travel times and add two additional passenger trains per day. In addition, the goal is to increase freight rail capacity.

The upgrades include new bypass tracks to add capacity, upgrades to warning signal systems, safety-related improvements, and multiple upgrades to existing track. A new rail bridge will cross the Coweeman River near Kelso, Washington, and there will be upgrades to wayside signal systems components at all control points, sidings and turnouts between the U.S./Canada border and Vancouver, Washington.

The upgrades to the wayside signal systems will allow Positive Train Control components (PTC), which are processor-based/communication-based train control system designed to prevent train accidents. PTC will be part of the next generation of passenger locomotives that will be employed in the Cascade service. PTC is a part of the federally mandated systems BNSF and other Class 1 railroads must deploy by Dec. 31, 2015.

Coal Exports Overseas

The corridor is growing in importance as coal from Wyoming is being shipped overseas. According to the Oregon Department of Transportation, freight volume is expected to grow by 60 percent over the next 25 years.

In 2013, Millennium Bulk Terminals submitted an application for a proposed coal export terminal at the site of a former Reynolds Aluminum smelter, in Cowlitz County, Washington. The terminal would ultimately export up to 44 million metric tons of coal annually to China.

Bakken Oil to Refineries

In addition to coal, BNSF runs oil trains from North Dakota’s Bakken formation to refineries in Washington. The trains can run up to 150 tank cars in length.

Currently, passenger service utilizes shared track with freight trains, and a key feature is the creation of sidings that allow freight and passenger trains to pass each other. In addition to creating new sidings, some existing siding tracks will be extended.

The passenger service upgrades will also include station upgrades and eight new locomotives.

The improvements are funded by the federal government in conjunction with Oregon and Washington. In Washington state alone, nearly $800 million in federal high-speed rail funds have been received for the project.

The project is scheduled to be completed by 2017.

© 2015 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
BH Media

Berkshire Continues to Snap Up Community Newspapers

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Newspaper acquisitions don’t make a lot of news these days, as the high-tech online content providers get most of the attention. Meanwhile, Berkshire Hathaway, through its BH Media Group, continues to snap up newspapers in small and medium-sized markets.

BH Media’ Group’s latest acquisitions are the Franklin News-Post, which covers Rocky Mount, Virginia, and the Martinsville Bulletin, which covers Martinsville, Virginia. The papers have a combined circulation of just over 17,000.

Martinsville Bulletin’s publisher, George Harris, is retiring after a 43-years working at the newspaper.

A Focus on Community News

The acquisitions are in line with BH Media Group’s emphasis on community papers that are still the go to source for local news, sports and events.

BH Media Group currently has a portfolio of 71 newspapers and other titles located in 10 states, including Alabama, Florida, Iowa, Nebraska, New Jersey, North Carolina, Oklahoma, South Carolina, Texas and Virginia. They also operate WPLG-TV, an ABC affiliate in Miami, FL.

BH Media Group does not have a national news gathering operation. It uses wire service for national news, but does cover regional news and state governments, sharing that information across its newspapers.

To read a Special Report on BH Media Group’s revenues and acquisition strategies see BH Media Finds Multiples Success.

© 2015 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
Fruit of the Loom Marmon Group

Fruit of the Loom Finds Synergy with Sister Company Wells Lamont Industrial

(BRK.A), (BRK.B)

The term synergy, the positive results that come when businesses work together, is often promised in the creation of conglomerates, but is rarely achieved. Most often it is promised by investment bankers trying to get companies to merge, only to later prove to be a mirage when the actuality of the needs of separate operating units prove incompatible.

Even Small Synergies Make a Difference

Fortunately, for Berkshire Hathaway’s Fruit of the Loom and Wells Lamont Industrial companies the synergies are real and bring benefits to both units.

Wells Lamont Industrial, which operates as a part of Berkshire Hathaway’s Marmon Group, has struck a deal with Berkshire’s Fruit of the Loom to equip the employees in its production facilities with Wells Lamont gloves starting in 2015.

Wells Lamont Industrial manufactures a comprehensive selection of hand protection including cut resistant, heat resistant, general purpose, liquid/chemical resistant, leather gloves, and other types of gloves.

“As a Berkshire Hathaway company we look to support our sister companies and were thus introduced to Wells Lamont Industrial,” says Wendy Emmitt, Senior Manager of Safety for Fruit of the Loom. “We were so pleased to discover their hand and arm solutions were not only more cost effective, but were of the highest quality in the industry.

Whether cutting fabric, welding balancing beams, stitching footballs or handling logistics, we have thousands of employees that require gloves to keep their hands protected,” says Emmitt. “Having the guidance and support to ensure we use the right product for each job is critical and Wells Lamont Industrial has proven to be the right partner in making those decisions.”

Fruit of the Loom was acquired by Berkshire Hathaway in 2002, and the Marmon Group was acquired by Berkshire Hathaway in 2008.

© 2015 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

Heinz-Kraft Merger Makes Berkshire Major Player at the Kitchen Table

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Berkshire Hathaway and 3G Capital have upped their bet on the tastes of American consumers. H.J. Heinz, which is wholly owned by 3G Capital and Berkshire Hathaway, will acquire Kraft Foods Group in a mega-merger that creates a $37 billion food company that will be the number five food and beverage purveyor in the world, and North America’s number three food company.

The combined company will be known as The Kraft Heinz Company.

Kraft Heinz will be 51 percent owned by 3G Capital and Berkshire Hathaway. Kraft shareholders will own the remaining 49 percent. The deal is expected to close in the second half of 2015.

The combined company will have a portfolio of packaged food brands that includes Heinz ketchup, Philadelphia cream cheese, and Oscar Mayer meats.

Kraft has $18 billion in annual sales, employs 22,500 workers, and boasts that 98 percent of U.S. and Canadian households have Kraft products in their kitchens. Nine of Kraft’s brands have more than $500 million in annual sales, and 80 percent of sales are in categories where they hold the #1 or #2 market position.

Kraft Heinz will have $28 billion in sales with eight $1+ billion brands and five brands between $500 million-$1 billion.

Under the terms of the merger, Kraft shareholders will receive one share of the combined company and a special cash dividend of $16.50 per share. The special cash dividend will be funded by 3G Capital and Berkshire Hathaway. While Berkshire is putting in cash, it is not swapping any Berkshire stock, which is Warren Buffett’s preferred method of acquisition.

3G Capital and Berkshire acquired Heinz in 2013 for $23.2 billion. The day to day management of the company has been handled by 3G Capital, with 3G’s managing partner, Alex Behring, serving as Heinz chairman. Behring will assume the reins of the new company as chairman, and current Kraft chief executive John Cahill will be appointed vice chairman.

Kraft has struggled in recent years as its packaged foods such as Velveeta, Miracle Whip, Planters, Jell-O and Kool-Aid have lost ground in the era of natural foods, however Heinz’s strength internationally is seen as a plus for the combined company. Kraft’s current markets are the U.S., Canada and Puerto Rico.

On the investor side, Kraft was a reliable dividend stock for investors as it’s brands brought steady earnings, even amidst lackluster growth. Its goal has been to “deliver steady, reliable growth with a strong focus on cash flow to fund a highly competitive dividend…” At the time of the merger announcement its annual dividend yielded 3.59 percent.

For Berkshire and 3G the deal is already a winner. Barron’s states “By our calculation, 3G and Berkshire have tripled their original $8.5 billion ($4.25 billion for each) equity investment in Heinz in less than two years, which amounts to a private-equity type score on a deal that originally looked like it was fully priced. Heinz was taken private at about 20 times forward earnings. We estimate that Berkshire and 3G are each sitting on more than $10 billion in profits from their investments in Heinz.”

The deal will also raise Heinz’s debt rating. In a press release, Kraft Heinz states that it is “fully committed to maintaining an investment grade rating; Company plans to maintain Kraft’s current dividend per share, which is expected to increase over time.”

Alex Behring’s management of Heinz has brought significant cost cutting, and a similar approach is expected at Kraft Heinz. The company expects to cut $1.5 billion in annual expenses by the end of 2017.

“This is my kind of transaction, uniting two world-class organizations and delivering shareholder value,” Warren Buffett said. “I’m excited by the opportunities for what this new combined organization will achieve.”

3G’s and Berkshire’s focus is on a long term investment. Kraft’s announcement of the merger states “Berkshire Hathaway and 3G Capital have a history of successful partnerships and are committed to long-term ownership of The Kraft Heinz Company as it strengthens its leadership position in the industry.”

The company notes that “As the cash consideration is fully funded by common equity from Berkshire Hathaway and 3G Capital, the merger is not expected to increase the debt levels of The Kraft Heinz Company. The Company is fully committed to deleveraging in a timely manner and to maintaining an investment grade rating going forward.”

Buffett, who drinks five cans of Coke a day, will now have lots of packaged foods to munch on all day long. He recently joked that the secret to his longevity was that “I eat like a six-year-old.”

Could his self-confessed love for munching on UTZ brand potato sticks make Utz Quality Foods, the largest independent privately held snack food brand in the U.S., a fit someday for Kraft Heinz?

© 2015 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
BNSF

BNSF Battles Oil Refiners Over $1,000 Tank Car Surcharge

(BRK.A), (BRK.B)

A lawsuit brought by AFPM, a trade association representing 400 refining and petrochemical companies, over BNSF Railway’s $1,000 tank car surcharge is the latest round in a battle between keeping costs low in producing crude oil from the Bakken formation and the safety of its transport to refiners.

With the Bakken oil boom, BNSF has become the largest transporter of crude oil in North America, moving some 600,000 barrels of oil per day, but the steep decline in worldwide oil prices has put pressure on Bakken oil producers due to the high cost of production as compared to oil from the Middle East.

The $1,000 per tank car surcharge started January 1, 2015, as BNSF pushed oil producers and refiners to shift to new safer tank cars that decrease the risk of fire in the case of derailment. With each tank car holding up to 34,500 US gallons, the charge adds just under 3 cents per gallon, or $1.26 a barrel.

BNSF’s Limited Options

As a common carrier, Berkshire Hathaway’s BNSF Railway can’t refuse under most circumstances to carry cargo, despite the potential loss or damage presented by the cargo. And, while BNSF’s growing role as a mobile crude oil pipeline has meant billions in new revenue, it also has presented new risks in regards to fire in the event of derailment, collision, or other accidents. In addition to pushing for safer tank cars BNSF has boosted training for both its crews and emergency responders in communities along its routes.

All Crude Oil is Not the Same

Crude Oil from the Bakken formation is classified as “light sweet crude,” a type of crude oil that has high volatility and flammability. The Wall Street Journal reported that “U.S. regulators recently called Bakken crude an imminent hazard because of what they believe is its unusually flammable nature…”

According to The Wall Street Journal, the oil derived from North Dakota’s Bakken shale has an 8 pounds per square inch Reid Vapor Pressure in warmer weather and 12.5 in colder weather. This is significantly higher than oil derived from the Eagle Ford Shale in Texas.

AFPM’s position is that the surcharge on tank cars ignores the root cause of derailments, which they assert is tied to poor track conditions and human error. In a letter to Transportation Secretary Anthony Foxx, AFPM stated that “Any effort to enhance rail safety must begin with addressing track integrity and human factors, which account for sixty percent of derailments. Investment in accident prevention would result in the greatest reduction in the risk of rail incidents.”

In response to the lawsuit, BNSF issued a statement that called the surcharge “consistent with BNSF’s ongoing efforts to ensure the safe transport of crude on our network, including voluntary adoption of enhanced operating practices around crude oil shipments and requesting the federal government to make newer, safer tank cars the new standard for crude-by-rail shipments, replacing the older DOT-111 and non-modified CPC-1232 cars.”

© 2015 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
Buffett Successors Todd Combs and Ted Weschler Warren Buffett

Are Ajit Jain and Greg Abel the Successors to Warren Buffett and Charlie Munger?

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Despite Warren Buffett being a spry age 84, and Charlie Munger a youthful 91, the question of the successor or successors that will lead Berkshire Hathaway continues to be on analysts’ and commentators’ minds.

“Both the board and I believe we now have the right person to succeed me as CEO — a successor ready to assume the job the day after I die or step down,” Buffett has said.

Now, in his letter published in the 2014 Annual Report, Charlie Munger seems to hint that Ajit Jain or Greg Abel could be in line to provide the leadership that will carry Berkshire forward.

“For instance, Ajit Jain and Greg Abel are proven performers who would probably be under-described as “world-class.” “World-leading” would be the description I would choose. In some important ways, each is a better business executive than Buffett.

And I believe neither Jain nor Abel would (1) leave Berkshire, no matter what someone else offered or (2) desire much change in the Berkshire system.”

While neither Buffett nor Munger has officially revealed the next leader or leaders of Berkshire Hathaway, both Jain and Abel would seem to fit the bill.

First, they would be promoted from inside the company, and thus are steeped in Berkshire’s unique corporate culture.

Secondly, they are both young enough to have long reigns at a company that certainly has no interest in a mandatory retirement age, and each of them would bring essential skill sets to the job.

Both have played important leadership roles heading two of Berkshire’s largest units.

Ajit Jain, as the man who has built Berkshire’s insurance and reinsurance empire, is better equipped than almost anyone in the world to take on the important task of making sure Berkshire’s insurance companies don’t try to grow by taking on undue risk.

Greg Abel, as the head of Berkshire Hathaway Energy, certainly knows about capital allocation. Under his leadership, BHE has grown into one of the world’s largest energy providers and a leader in renewable energy generation. He also sits on the Board of Heinz, and BHE includes Berkshire Hathaway Home Services, Berkshire’s rapidly expanding real estate sales unit. Both of these companies give him additional insight into consumer markets.

As for their ages, Jain is age 63, and Abel is only 52, so they hopefully would have many years to put their stamps on Berkshire.

So which one is it?

Why not both of them?

Well, while Buffett spoke in the singular, he has already stated that his replacement would probably see his various roles filled by several people.

The job of managing Berkshire’s $125 billion and growing stock portfolio will almost certainly fall to Ted Weschler and Todd Combs, who Buffett has been grooming by giving each a multi-billion dollar stock portfolio to manage.

Together, Jain and Abel would also be sounding boards and counter balances for each other in much the same way that Buffett has used Munger.

While Warren Buffett rightly gets the lion’s share of credit for Berkshire’s phenomenal growth, Charlie Munger’s sage advice has often been overlooked by the press.

It certainly hasn’t been overlooked by Buffett.

While the latest buzz comes from Munger, Buffett has repeatedly praised both Jain and Abel.

On Jain, Buffett said “It is impossible to overstate how valuable Ajit [Jain] is to Berkshire. Don’t worry about my health; worry about his.”

On Abel, Buffett has highlighted the impact that he and Mathew Rose (CEO of BNSF) have had on Berkshire, stating “I am also both proud and grateful for what they have accomplished for Berkshire shareholders.”

So, if Ajit Jain and Greg Abel are indeed the future leaders of Berkshire, shareholders can look forward to continued smart and capable leadership.

And we shouldn’t forget BNSF’s executive chairman Mathew Rose, who is only in his mid-fifties. He is certainly a prime contender as well.

© 2015 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 Industries Acquires M&M Manufacturing

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Berkshire Hathaway’s wholly owned MiTek Industries has acquired M&M Manufacturing, which is based in Fort Worth, Texas.

According to a MiTek press release, M&M Manufacturing is one of the country’s largest producers of sheet metal products, primarily servicing the air distribution and ventilation market. M&M provides a comprehensive range of round, rectangular, oval and spiral ductwork, fittings and accessories for residential and commercial construction.

M&M Manufacturing was founded by the Stepp family in Fort Worth, Texas in 1958, as a small sheet metal shop. The is now one of the largest HVAC ductwork and product manufacturers in the United States, with 6 manufacturing facilities producing more than 9,000 different products and employing nearly 800 team members.

M&M’s own extensive growth over the past decade included acquiring the Wilkins Corporation of Little Rock, Arkansas, in 2010. Wilkins manufactures steel duct pipe and fittings for the HVAC industry. M&M also opened a new a manufacturing plant in Austin, Texas, in 2014.

MiTek Industries is a “diversified, global business supplying a wide range of engineered products, proprietary design software, and automated equipment sold into the broad construction and industrial end markets.”

MiTek has been aggressive in its acquisitions, and in 2013 and 2014 acquired Benson Industries, Kova Solutions, Cubic Designs, and Ellis & Watts Global Industries.

© 2015 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.