Acquisitions involving Warren Buffett just seem to go off
without a hitch. Witness the octogenarian Oracle of
Omahas recent purchase of H.J. Heinz Co., whose
shareholders relished his bid to take the ketchup giant
private. The $27.4 billion buyout, which closed on June 7, paid
$72.50 for Pittsburgh-based Heinzs outstanding shares, a
20 percent premium on their closing price at the February 14
Buffetts Berkshire Hathaway split the bill 50-50 with
3G Capital, an investment firm led by fellow billionaire Jorge
Paulo Lemann, Brazils richest man. 3G, whose main office
is in New York, had already shown a taste for U.S. edibles with
global appeal by picking up Burger King Holdings for $3.3
billion in 2010.
Buffett likes getting good deals for well-run companies that
generate healthy returns and show growth potential. Heinz may
be an American institution, but in the 2013 fiscal year almost
a quarter of its sales came from emerging markets. The
simplicity of its core product mirrors one of Buffetts
long-held investments, Coca-Cola Co., a position hes
steadily built since 1988.
Antonio Weiss, who acted as lead banker to Omaha,
Nebraskabased Berkshire Hathaway and 3G, advised on the
Burger King buyout. Weiss, the New Yorkbased global head
of investment banking for Lazard, fronted a team that included
managing director Alexander Hecker. JPMorgan Chase & Co.
and Wells Fargo & Co. also advised the consortium;
representing Heinz were Bank of America Merrill Lynch and
independent investment banks Centerview Partners and Moelis
& Co. Total advisory fees were as high as $107 million.
True to form, Buffett reportedly has no plans to ever sell a
share in Heinz; he and Lemann dont appear to have hatched
this leveraged buyout with an exit in mind. Its a
strategic deal as opposed to a financial deal, says
Weiss, 47, who was Lazards Paris-based global head of
M&A until 2009. Its a long-term commitment to
the company, to the industry.
But Heinz began restructuring almost immediately, a move
that points to Lemann and 3Gs hands-on approach. Chief
executive William Johnson was ousted in favor of cost-cutter
Bernardo Hees, previously CEO of Burger King. In November
management announced plans to trim 1,350 jobs by closing three
North American plants. Heinz isnt a traditional private
equity deal, Weiss notes: There is no limited partner
relationship in an institutional sense, with a return
requirement within some time period. As a result, he
explains, the investor group can focus on long-term growth.
Bucking the Trend
With these extraordinary closed and pending deals,
our ten rainmakers earned their keep in choppy markets.