OMAHA, NEB. & CHICAGO, December 25 /CNW/ - Berkshire Hathaway Chairman
and CEO Warren Buffett and Tom Pritzker, Chairman of Marmon Holdings today
announced that Berkshire will purchase 60% of Marmon Holdings, Inc., a private
company owned by trusts for the benefit of members of the Pritzker Family of
The closing is anticipated to occur in the first quarter of 2008. Prior
to closing, Marmon will make a substantial distribution of cash and certain
assets to the selling shareholders. At closing Berkshire will acquire 60% of
Marmon for $4.5 billion. The remaining 40% will be acquired through staged
acquisitions over a five to six year period for consideration to be based on
the future earnings of Marmon. The transaction remains subject to customary
closing conditions, including regulatory approvals.
Marmon is a private company that was acquired in 1953 by two brothers,
Jay and Robert Pritzker, when it was a small ailing manufacturing operation in
Ohio. In 2002 Jay's son Tom became Chairman of Marmon. He then recruited John
Nichols to become CEO of Marmon and in 2006 John was succeeded by Frank Ptak
who is currently CEO of Marmon.
Today, the Marmon Group is an international association of more than 125
manufacturing and service businesses that operate independently within diverse
business sectors. These sectors are Wire & Cable, serving energy related
markets, residential and non-residential construction and other industries;
Transportation Services & Engineered Products, including railroad tank cars
and intermodal tank containers; Highway Technologies, primarily serving the
heavy-duty highway transportation industry; Distribution Services for
specialty pipe and tubing; Flow Products for the plumbing, HVAC/R,
construction and industrial markets; Industrial Products including metal
fasteners, safety products and metal fabrication; Construction Services,
providing the leasing and operation of mobile cranes primarily to the energy,
mining and petrochemical markets; Water Treatment equipment for residential,
commercial and industrial applications; and Retail Services, providing store
fixtures, food preparation equipment and related services. Member companies
employ approximately 21,000 people and operate more than 250 manufacturing,
distribution and service facilities, primarily in North America, the United
Kingdom, Europe and China. Collective revenues total approximately $7 billion.
Between 2002 and 2007 Marmon's operating income more than tripled. During
that same period operating margins increased from 4.9% to 12.4%.
In commenting on the transaction, Warren Buffett noted: "Our transaction
was done just the way Jay would have liked it to be done - no consultants or
studies. After meeting with Messrs. Ptak and Nichols, they were just what I
expected from Marmon's impressive record of growth and profitability over the
years, and the decision to purchase and work out the details of this
transaction was done without delay. I am pleased that over the next five to
six years, we will be partnering and working with Tom Pritzker, John Nichols
and Frank Ptak in continuing to build Marmon."
Tom Pritzker observed "This transaction is the culmination of a process
that began six years ago. We brought John Nichols in as CEO and began
rebuilding Marmon's existing lines of business. Berkshire Hathaway's decision
recognizes the fine work of our management team over this period and the
transaction is being done in the context of the previously reported
restructuring of our family business interests."
John Nichols said "This is a transaction that works for all stakeholders.
It will allow Marmon to thrive under its existing management team and continue
implementing our management philosophy. While we have a new shareholder, it is
clear that Berkshire Hathaway shares the values and approach established by
the Pritzkers over many decades."
Frank Ptak said: "We have had a very positive experience working with Tom
and the leadership of the Pritzker family. We are very happy that they have
been able to structure this transaction in the way that will allow us to
continue to grow Marmon. From management's perspective, we are excited and
energized by the idea that Warren Buffett is partnering with Tom Pritzker and
John Nichols to provide guidance for our future growth."
Berkshire Hathaway and its subsidiaries engage in a number of diverse
business activities including property and casualty insurance and reinsurance,
utilities and energy, finance, manufacturing, retailing and services. Common
stock of the company is listed on the New York Stock Exchange, trading symbols
BRK.A and BRK.B.
For further information:
For further information: Berkshire Hathaway Inc. Marc Hamburg,
402-346-1400 or Marmon Holdings, Inc. David Dees, 312-845-5343