No. of Recommendations: 5
Over the years, Berkshire’s operating companies have been steadily buying smaller businesses. There is expertise inside Berkshire’s operating companies and a willingness to pick up additive acquisitions at favorable prices.
We are led to believe that private equity firms and their institutional & monied family owners together with incentivized PE managers are increasingly in a pickle with limited exit options. The recent CompSecure announcement buying Husky for only what is judged to be a paltry 30%,maybe 40% gain over the past 7 years, may be a bell ringing signaling future opportunities for Berkshire.
Yes, PE likely has not improved or reinvested adequately in their held companies. This is akin to Berkshire buying BNSF and doubling the train capacity via double stacking bridge and tunnel improvements provided the acquired companies have characteristics befitting improvement investments. There is probably not that many additive type companies available to place Berkshire’s cash hoard, still, if it’s a good enough deal, Berkshire has the managers with the skills to make it work.
Your views are appreciated.
Uwharrie
