xboojum

I had hoped that Marmon would turn into this for small/midsized industrials. It's not clear if it hasn't, really, or if the acquisitions are just not sizable enough, even in aggregate, to be really noticeable.

In this otherwise rather grim story about declining toy sales in the UK, it's noted that the bestselling toy in the UK last year was Jazwares' Squishmallows: https://www.theguardian.com/business/2024/jan/23/squishmallows-uk-toy-sales-games-action-figures

This whole post seems about right to me. Berkshire's batting average in large acquisitions has gone down, even if nothing has been as bad as Dexter Shoe (the Precision Castparts acquisition in particular seems to gone terribly, although as a PCP shareholder at the time it bailed me out), showing the importance of BHE; if there's nothing tempting in the market, they always have the backup option of bunting for a single by building more solar/wind at reasonable, predictable returns, and while I think Pilot is a perfectly fine business . Between that and tuck-ins at Lubrizol, MiTek, etc., they have consistent options. It really shows the franchise value of Constellation Software, though, in their ability to swallow all sorts of plankton-scale companies at a rate meaningful at what's now a $70 billion company (in addition to their recent pivot to buying large companies from forced sellers).

How many have we seen in the last decade? Pilot and Van Tuyl are it, right? The rise of private offices and private equity funds playing in the mom-and-pop buyout space means there's a lot more competition in the smaller side of the market (which isn't going to be sizable enough for Berkshire at this point). If Larson-Juhl wanted to sell but keep its management in place, they'd have probably have dozens of specialists to choose from that didn't exist in 2002. And the true whales of family-controlled privates entities, like a Mars or S. C. Johnson, are big enough that it's not apparent that selling to Berkshire makes any sense for them; they can bring in professional managers if they don't have a next generation of family, and it would be easy for them to monetize a slice of the company without giving up family control or involving Berkshire. Oriental Trading Company was a busted private equity deal—it feels like that sort of things, or buying divisions from other large companies, and purchases of whole public companies—is going to be where Berkshire has to look, compared to the handshake deals Buffett used to pride himself on.

If I remember correctly, Mars, Cargill, and Koch (not in that order) are three of the five biggest private companies by revenue in the US, the others being the well-run grocery chains Publix (largely based in Florida) and HEB (largely based in Texas).

Looks like the CEO of Lubrizol (since all of 2021) has been removed; JM's Mary Rhinehart stepping in for now: https://www.businesswire.com/news/home/20220311005450/en/Mary-Rhinehart-Named-Interim-President-and-CEO-of-Lubrizol