Product category:
Manufacturing dealerships, agencies and acquisitions
News Release from: TaeguTec UK
Edited by the Manufacturingtalk Editorial
Team on 21 June 2006
Berkshire Hathaway acquires toolmaking
group
During May, 2006, Berkshire Hathaway, USA, agreed to acquire 80% of the International Metalworking Companies - including Iscar and TaeguTec - in a transaction that values IMC at US$5 billion.
On the 5th May 2006 Berkshire Hathaway agreed to acquire 80% of the International Metalworking Companies (IMC) in a transaction that values IMC at US$5 billion The privately held group that encompasses more than 10 companies with operations worldwide including Iscar, TaeguTec, Ingersoll and InnoTool is an industry leader in the metal cutting tool industry
This article was originally published on Manufacturingtalk on 12 Mar 2002 at 8.00am (UK)
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Upon completion of the transaction, Berkshire will own 80% of the business and the Wertheimer family, IMC's current shareholders, will maintain the remaining 20%.
Following the acquisition IMC will continue to be managed by its current management team, including chairman Eitan Wertheimer and president and chief executive officer Jacob Harpaz and the rest of its current worldwide management team.
IMC will remain headquartered in Tefen, Israel, and its worldwide business operations will continue as usual.
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On the TaeguTec stand at the recent MACH 2006 exhibition at the Birmingham NEC, Harpaz said: "We are looking to maintain the IMC culture and work the same way as we always have and Warren Buffet was insisting that the Wertheimer family maintained a 20% share of IMC to guarantee this".
"Usually Warren Buffet buys the entire company but he wanted the group to continue being managed the way it is today.
The company wants to move on to be the number one in the market and we want to do it within this generation." Harpaz said that the considerable gap between the IMC group and the number one can not be closed by innovation and product development alone and can only be closed by acquisitions, a strategy the group has already commenced.
"I believe Warren Buffet will take us in the right direction.
When we told him we wanted to be number one, he told us he would help us to reach this position".
"The most important thing is that the business culture remains the same." Harpaz continued: "There are no plans for short term or long term changes - he bought us because we are a successful company - why destroy something that works well.
He has invested in one of the finest companies in the world and he is relying on us.
He has come in with money that will help us to achieve the next step." Speaking of the IMC culture Harpaz said: "Each company in the group maintains control of its own RandD and each develops its own product and wants to prove that it is the best in the group.
The companies in the group are too big to encompass R and D and product development under one roof".
"Each company wants to prove it is the best - so we let them run! It's good for the group and good for the customer.
The IMC group is the biggest private company in Israel and everybody wants to copy the business model.
We ensure each company in the group has the same philosophy.
We have introduced the Israeli working culture to TaeguTec in Korea and to Ingersoll in Germany with great success.
We are the first cutting tool company to buy a Japanese cutting tool manufacturer - and they are also very comfortable adopting our working culture." Discussing the finer details of the US$5 billion deal, Harpaz said: "We were the first to approach Warren Buffet with a one and a half page letter".
"The next day he sent us an email inviting us to see him.
Everything went so fast and everything you read about the man is so true - he is a unique person." Warren Buffett, Berkshire Hathaway chairman and chief executive Officer said: "We are delighted to partner with the Wertheimer family and IMC's current management, led by Eitan Wertheimer and Jacob Harpaz.
As a truly international business, IMC is a top performer in its industry, with exposure to European, Asian and Latin American markets, as well as significant opportunities for growth as it continues to penetrate the North American market.
My partner, Charlie Munger, and I have been impressed by IMC's simple and profitable business model.
With this acquisition, we have the benefit of investing in a stable business with very significant growth prospects." Wertheimer said: "As a member of the Berkshire family we'll have the benefit of a strong platform that's committed to continuing our historical success.
This transaction is not only significant for our company, our customers and our employees, but also for our industry, and for the State of Israel.
We are gratified by Berkshire's investment in the group, and proud of what we have achieved since Iscar's founding more than 50 years ago by my father Stef Wertheimer, who will continue to lend his vision to the group.
We are looking forward to a long and profitable partnership with Berkshire Hathaway." * About Berkshire Hathaway - Berkshire Hathaway and its subsidiaries engage in diverse business activities, among which the most important is the property and casualty insurance business conducted on both a direct and reinsurance basis.
Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.
* About the International Metalworking Companies (IMC) - the International Metalworking Companies provide a comprehensive range of tools for the full scope of metalworking applications.
The group is dedicated to a philosophy of continuous improvement and innovation in all facets of its operations, including manufacturing, product development, distribution, sales, and administrative functions.
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