Warren Buffett's Berkshire Hathaway Inc on Tuesday deepened its commitment to the American economy, saying it bought a major stake in Pilot Flying J, the largest U.S. truck stop operator, and will become majority owner in six years.
Warren Buffett’s Berkshire Hathaway Inc on Tuesday deepened its commitment to the American economy, saying it bought a major stake in Pilot Flying J, the largest U.S. truck stop operator, and will become majority owner in six years. Pilot Flying J, whose formal name is Pilot Travel Centers LLC, has more than 750 locations in 44 U.S. states and Canada selling gas, diesel fuel, and convenience goods, and offering trucks more than 70,000 parking spaces and 5,000 diesel lanes. It employs more than more than 27,000 people and is the 15th-largest private company in the United States, with annual sales of about $19.6 billion, Forbes magazine said.
Berkshire acquired a 38.6-percent stake of Pilot Flying J for an undisclosed price, and plans to boost its stake in the Knoxville, Tennessee-based company to 80 percent in 2023. The Haslam family led by billionaire Jimmy Haslam, who also controls the Cleveland Browns football team, will keep a 50.1 percent stake and the Maggelet family’s FJ Management Inc will retain 11.3 percent ownership until then. Pilot Flying J’s management team, led by Jimmy Haslam, will also remain in place.
“Jimmy Haslam and his team have created an industry leader and a key enabler of the nation’s economy,” Buffett said in a statement. “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.” The purchase may help Buffett deploy a sizable chunk of Berkshire’s $100-billion cash hoard, after his efforts this year to buy the Oncor utility in Texas and help finance a Kraft Heinz Co takeover of Unilever Plc fell apart. It also boosts his bet on U.S. economic growth.
Berkshire owns the BNSF railroad, as well as several companies that make industrial parts, including Precision Castparts and Marmon. The Omaha, Nebraska-based conglomerate owns more than 90 businesses including Geico insurance, Dairy Queen ice cream, and several utilities. Pilot Flying J has faced scrutiny in recent years after authorities accused employees of withholding diesel fuel rebates from customers.
It paid a $92-million fine in 2014 to settle a U.S. criminal probe, and several executives were later criminally charged.Jimmy Haslam, whose brother Bill is Tennessee’s governor, told CNBC the transaction with Buffett came together after mutual friend Byron Trott, who runs BDT Capital Partners LLC, introduced them in May. BDT is exiting its investment in Pilot Flying J.