Buffett’s Berkshire Wants IMI’s Less Profitable Businesses
IMI Plc announced its intentions to sell some of its less profitable businesses in 2014. “[The deal] leaves us in a very focused flow-control business — focused entirely on very positive industrial end markets,” said Martin Lamb — outgoing chief executive of IMI — to Reuters.
The Marmon Group, owned by Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB), is set to buy IMI’s beverage dispenser and merchandising businesses — makers of drink dispenser valves and marketing displays — for $1.10 billion. Such businesses bring in a total of 22 percent of the engineering company’s revenue. IMI intends to return $1 billion of the funds from the sale to shareholders, leaving just over $100 million to be put into the company’s pension fund.
According to Reuters, after a slow start in the market this year, IMI said it expects to not only meet market expectations in its full-year results, but to have an improved second half. “We expect the improvement in group margins and higher medium-term growth prospects of the more focused business portfolio to be reflected in higher valuation multiples for the group,” said JPMorgan analyst Glen Liddy, according to Bloomberg.