Berkshire Buys CTB From American Securities –

Berkshire Hathaway, the holding company owned by Warren Buffett, recently purchased CTB International Corporation from American Securities Capital Partners (ASCP). The transaction is valued at $180 million, and at $12.75 per share, is an $11.92-per-share increase since ASCP took CTB public in August 1997.

ASCP purchased CTB in January 1996.

“We were delighted to sell to Berkshire,” said Michael Fisch, president of ASCP. “CTB is a third-generation, family-owned business and the owners were sensitive toward finding a good home for their company and its workers. It is great long-term for the company, and a great immediate return for our investors.”

Recent reports indicate Buffett’s Berkshire Hathaway may make a bid for GE’s reinsurance group, after Jack Welch replacement Jeffrey Immelt began a major restructuring of several business units in an effort to boost profits.

ASCP, with a 42% stake in CTB, has seen CTB’s EBITDA increase from $16 million to $40 million, and revenue climb to $250 million, a $110 million increase since ASCP purchased the company.

Bear Stearns, Credit Suisse First Boston and George K. Baum & Company advised CTB and its board during procedure.

ASCP is the private equity investment arm of American Securities, founded in 1947 by William Rosenwald, to manage his share of his family’s Sears Roebuck fortune. ASCP closed on its third and most recent fund, the $650 million American Securities Partners III, in 2001. The firm has yet to make an acquisition using capital from this fund, but, according to Fisch, “We have a lot going on…we expect to announce three or four deals by the end of the year.”

ASCP’s only other exit this year was its divestiture from DRL Holdings, a direct marketing and catalog business. According to Fisch, ASCP focuses on middle market acquisitions, “in the $100 million to $300 million range,” and typically invests $30 million to $150 million in each company.

Chris Chocola, a descendent of CTB’s founder, chairs CTB, a 50-year-old company with over 1,300 employees. Chocola, recently elected to represent Indiana in the U.S. Congress, will no longer hold a position in the company.