By Dow Jones Business News, October 16, 2013, 06:25:00 AM EDT
By Rory Gallivan
LONDON--Marmon Group LLC, the industrial arm of Warren Buffett's Berkshire Hathaway Inc. (BRKA), said Wednesday it has
bought the drinks dispensing and merchandising operations of British engineering company IMI PLC (IMI.LN) for $1.1
The buy 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'sEXSIF 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 makes machines used in such places as 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 reported 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.
IMI said the disposal would 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.
"[This is] a positive development that will enable IMI to focus on the better margin and higher growth fluid controls
business," said JP Morgan Cazenove analyst Glen Liddy.
IMI Chief Executive Martin Lamb told reporters that the company's acquisition pipeline is "reasonably well stoked in
terms of opportunities', focused on bolt-on deals valued between GBP50 million and GBP150 million.
"We are in fine shape to make those acquisitions with the balance sheet that we have irrespective of this return to
shareholders arising from the disposal of beverage and merchandising," said Mr. Lamb.
"I am sure over the next 12 months or so we will put that money to good purpose."
In a separate announcement, IMI said trading has been in line with expectations and that full-year results should meet
its previous predictions.
Simon Zekaria contributed to this article.
Write to Rory Gallivan at email@example.com
Corrections & Amplifications
This item was corrected at 3:57 p.m. EDT to show that IMI's beverage dispensing unit makes machines used in such
places as convenience stores, fast-food restaurants, hospitals and offices.
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