LONDON--Marmon Group LLC, the industrial arm of Warren Buffett's
Berkshire Hathaway Inc. (BRKA), has bought the drinks dispensing
and merchandising divisions of British engineering company IMI PLC
(IMI.LN) for $1.1 billion, the U.K. company said Wednesday.
The acquisition is the latest in a string of bolt-on
acquisitions that the billionaire's Berkshire investment group has
made in the U.S. and Europe as Mr. Buffett has encouraged the chief
executives of his operating companies to seek out smaller, less
risky deals than large purchases.
Marmon's EXSIF Worldwide unit acquired German industrial tank
specialist Lindenau Fahrzeugbau GmbH in June. HomeServices of
America, a residential estate brokerage and a subsidiary of
Berkshire's MidAmerican Energy Holdings said in August it would buy
smaller U.S. brokerage Prudential Fox & Roach for an
undisclosed sum.
Marmon is made up of three companies focused on industrial
components, transportation services, and retail technologies,
recording combined revenue of $7.16 billion in 2012.
IMI's beverage dispensing unit is a leading maker of machines
for selling drinks in public places like convenience stores,
fast-food restaurants, hospitals and offices.
The business recorded a 6% decline in operating profit to 24.9
million pounds ($39.8 million) on a 4% decline in revenue to GBP172
million in the six months to June 30. The unit notched up GBP349
million revenue for all of 2012.
The merchandising business specializes in designing product
displays for retailers. It reported a 19% rise in half-year
operating profit to GBP11.6 million on a 19% rise in revenue to
GBP83 million.
"These strong businesses are an excellent strategic fit with our
existing operations in the food service and retail industries as
well as with our decentralized business model," John Goody,
president of Marmon Retail Technologies, said in an statement.
The company said the disposal will allow it to return GBP620
million to shareholders and focus management's attention on its
other activities such as fluid technologies. IMI plans to pay an
additional GBP70 million to its pension fund.
In a separate announcement, IMI said trading has been in line
with expectations and that full-year results should meet its
previous predictions.
Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter:
@RoryGallivan
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