Author Topic: Next Berkshire acquisition speculation  (Read 38033 times)

Cigarbutt

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Re: Next Berkshire acquisition speculation
« Reply #60 on: December 07, 2019, 08:10:39 AM »
technically I suppose Berkshire sold another company today (or Marmon did, more specifically) - Owl Wire & Cable

with applied underwriters we've got a certified selling spree...

https://www.marketwatch.com/press-release/international-wire-group-acquires-owl-wire-and-cable-2019-12-06?siteid=bigcharts&dist=bigcharts
FWIW, I think this divestiture should not be regretted.
In addition to the regulatory challenges associated with their aggressive style, there was another aspect which was questionable and for which recent work suggests that a large part of their clients would be better served by another option.

In my jurisdiction, the workers comp insurance market is 100% funded (premiums and payouts) by the government. However, private parties can get 'involved' in the claims handling part and a way to do this is to 'mutualize' the costs and benefits that result from this activity. I have been peripherally 'involved' in this market. California (the main market for Applied) has a large self-insured workers comp market. The advantage of the products sold (aggressively) by Applied implied 1-savings on the administrative costs due to scale, 2-lower premiums by sharing the savings coming from the built-in incentive to self-improve practices and 3-the bright and effective use of reinsurance to deal with the excess of loss component. An essential ingredient was the trust necessary to outsource this aspect of the insurance transaction. It seems that self-insured groups can do a better job at cost savings and how to share the NPV effort. The report has been sponsored by a self-insured group but results correlate with what I've seen in my neck of the woods.

For those interested:
https://www.dir.ca.gov/osip/AppRequirements.htm
https://www.securityfund.org/assets/docs/Bickmore%20Comparision%20Self-Insurance%20v%20Insurance%20-%20FINAL.pdf

Note: This is not to say that self-insured groups will take over the traditional private insurance market, it is only to say that many clients presently under the Applied umbrella could get a better (and more transparent) deal elsewhere. I doubt Mr. Buffett wastes his time on such technical details but would not be surprised if he showed an unusual lack of concern (after a discussion with Mr. Jain) when the black sheep offered to fly on his own.
« Last Edit: December 07, 2019, 08:15:29 AM by Cigarbutt »


bennycx

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Re: Next Berkshire acquisition speculation
« Reply #61 on: December 30, 2019, 08:36:01 PM »
A merger with Microsoft would be great :)

rogermunibond

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Re: Next Berkshire acquisition speculation
« Reply #62 on: January 02, 2020, 09:59:59 AM »
TRUMPF Group - the kind of business that would be great for Berkshire to acquire.  Also an area where Iscar is under threat from laser cutting tools for industry.

https://www.nytimes.com/2009/07/12/business/global/12german.html

Another such private company - formerly Swiss now domiciled in Liechtenstein - Hilti Group - construction tools/systems, fire prevention systems, construction services

https://www.hilti.group/content/dam/documents/Media-Release/2019/march/Hilti_Company-Report_2018_en.pdf
« Last Edit: January 02, 2020, 10:06:47 AM by rogermunibond »

John Hjorth

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Re: Next Berkshire acquisition speculation
« Reply #63 on: January 02, 2020, 12:28:40 PM »
... Another such private company - formerly Swiss now domiciled in Liechtenstein - Hilti Group - construction tools/systems, fire prevention systems, construction services

https://www.hilti.group/content/dam/documents/Media-Release/2019/march/Hilti_Company-Report_2018_en.pdf

roger,

Yes, Hilti is a wonderful company with wonderful products. Here, it's highly respected for the quality of its products within the construction industry.
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Spekulatius

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Re: Next Berkshire acquisition speculation
« Reply #64 on: January 02, 2020, 02:42:19 PM »
TRUMPF Group - the kind of business that would be great for Berkshire to acquire.  Also an area where Iscar is under threat from laser cutting tools for industry.

https://www.nytimes.com/2009/07/12/business/global/12german.html

Another such private company - formerly Swiss now domiciled in Liechtenstein - Hilti Group - construction tools/systems, fire prevention systems, construction services

https://www.hilti.group/content/dam/documents/Media-Release/2019/march/Hilti_Company-Report_2018_en.pdf

Hilti used to be a public company and traded on the Swiss exchange. Trumpf is a Family owned business with a very long term focus. They developed their own photonics Technology for their lasers (the modules are build in NJ/US) in order to control the whole value chain. I don’t think they are likely to sell out.
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Jurgis

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Re: Next Berkshire acquisition speculation
« Reply #65 on: January 02, 2020, 02:55:03 PM »
TRUMPF Group - the kind of business that would be great for Berkshire to acquire.  Also an area where Iscar is under threat from laser cutting tools for industry.

https://www.nytimes.com/2009/07/12/business/global/12german.html

Another such private company - formerly Swiss now domiciled in Liechtenstein - Hilti Group - construction tools/systems, fire prevention systems, construction services

https://www.hilti.group/content/dam/documents/Media-Release/2019/march/Hilti_Company-Report_2018_en.pdf

Hilti used to be a public company and traded on the Swiss exchange. Trumpf is a Family owned business with a very long term focus. They developed their own photonics Technology for their lasers (the modules are build in NJ/US) in order to control the whole value chain. I don’t think they are likely to sell out.

Well, BRK could buy IPGP.  ;)
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Spekulatius

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Re: Next Berkshire acquisition speculation
« Reply #66 on: January 02, 2020, 04:45:09 PM »
TRUMPF Group - the kind of business that would be great for Berkshire to acquire.  Also an area where Iscar is under threat from laser cutting tools for industry.

https://www.nytimes.com/2009/07/12/business/global/12german.html

Another such private company - formerly Swiss now domiciled in Liechtenstein - Hilti Group - construction tools/systems, fire prevention systems, construction services

https://www.hilti.group/content/dam/documents/Media-Release/2019/march/Hilti_Company-Report_2018_en.pdf

Hilti used to be a public company and traded on the Swiss exchange. Trumpf is a Family owned business with a very long term focus. They developed their own photonics Technology for their lasers (the modules are build in NJ/US) in order to control the whole value chain. I don’t think they are likely to sell out.

Well, BRK could buy IPGP.  ;)

Yes, that would be a great company for Buffet to look at. I am guessing there are folks within Berkshire’s operations that understand IPGP’s  market position and moat. I have no idea if IPGP’s board would entertain a sale - the company is still founder driven to some extent.
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Jurgis

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Re: Next Berkshire acquisition speculation
« Reply #67 on: January 02, 2020, 10:32:40 PM »
TRUMPF Group - the kind of business that would be great for Berkshire to acquire.  Also an area where Iscar is under threat from laser cutting tools for industry.

https://www.nytimes.com/2009/07/12/business/global/12german.html

Another such private company - formerly Swiss now domiciled in Liechtenstein - Hilti Group - construction tools/systems, fire prevention systems, construction services

https://www.hilti.group/content/dam/documents/Media-Release/2019/march/Hilti_Company-Report_2018_en.pdf

Hilti used to be a public company and traded on the Swiss exchange. Trumpf is a Family owned business with a very long term focus. They developed their own photonics Technology for their lasers (the modules are build in NJ/US) in order to control the whole value chain. I don’t think they are likely to sell out.

Well, BRK could buy IPGP.  ;)

Yes, that would be a great company for Buffet to look at. I am guessing there are folks within Berkshire’s operations that understand IPGP’s  market position and moat. I have no idea if IPGP’s board would entertain a sale - the company is still founder driven to some extent.

They won't sell at current valuation I'd think, while Buffett won't pay a large premium.
And maybe the company is a bit too tech for Buffett.
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"Before you can be rich, you must be poor." - Nef Anyo
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meiroy

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Re: Next Berkshire acquisition speculation
« Reply #68 on: January 03, 2020, 02:16:57 AM »
Greenland.

Why is it that BRK has to buy all these huge companies? Why don't they acquire a mass of smaller companies?

Buying good small companies that can turn into multi-baggers, might actually improve BRK's pricing.

How much of the cash amount is actually beyond the float?
« Last Edit: January 03, 2020, 02:22:19 AM by meiroy »

DooDiligence

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Re: Next Berkshire acquisition speculation
« Reply #69 on: January 03, 2020, 07:09:01 AM »
Greenland.

Why is it that BRK has to buy all these huge companies? Why don't they acquire a mass of smaller companies?

Buying good small companies that can turn into multi-baggers, might actually improve BRK's pricing.

How much of the cash amount is actually beyond the float?

Let BRK subs do the sleuthing, negotiating & closings.
I'm sure many of them have wish lists.

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