- Reuters/Rick Wilking
Warren Buffett‘s Berkshire Hathaway purchased a stake in Pilot Travel Centers, which owns the Pilot Flying J chain of truck stops. The billionaire investor’s conglomerate said it will acquire 38.6% of Pilot Flying J, and plans to become its biggest shareholder over six years, it said in a release on Tuesday.
The stake adds to Berkshire Hathaway’s bet on the U.S. economy. Buffett already owns stakes in U.S. airlines and Burlington Northern Santa Fe Corp., one of America’s largest railroads, which would also benefit from an increase in trade and economic activity. “Whenever I hear people talk pessimistically about this country, I think they’re out of their mind,” Buffett said at an event last month. Pilot Flying J is the largest operator of travel centers in North America, with more than 27,000 employees, 750 locations across the US and Canada, and more than $20 billion in annual revenue.
For the time being, Cleveland Browns owner Jimmy Haslam’s family will remain as the majority shareholder, while Haslam will stay as CEO. Additionally, the Maggelet family will keep 11.3% ownership until 2023, at which point Berkshire will take over the majority stake.
“Pilot Flying J is built on a longstanding tradition of excellence and an unrivaled commitment to serving North America’s drivers,” Buffett, the chairman, president, and CEO of Berkshire Hathaway, said in the release. “Jimmy Haslam and his team have created an industry leader and a key enabler of the nation’s economy. The company has a smart growth strategy in place, and we look forward to a partnership that supports the trucking industry for years to come.”
BDT & Company advised Pilot Flying J, and as part of the deal, BDT Capital Partners exited its minority investment in it.
“Given the impeccable reputation of Warren Buffett’s Berkshire Hathaway, and our shared vision and values, we decided this was an ideal opportunity,” Haslam said in a public statement. “As a family business that has evolved and prospered over the last six decades, we knew that any potential partner would need to share our commitment and have a proven track record as a long-term investor.”
It has been a slow year on the acquisition front by Buffett’s standards, though he has done some deals, including the extension of a $1.5 billion line of credit to the Canadian lender Home Capital Group. Buffett’s firm also sunk $377 million into the real-estate investment trust Store Capital. In June, Berkshire became Bank of America’s biggest shareholder after exercising warrants to buy 700 million common shares.
Buffett has run into a few roadblocks this year, getting outbid for the energy company Oncor in August. In February, the Buffett-backed conglomerate Kraft Heinz called off plans to merge with Unilever, a deal valued at $143 billion.