Warren Buffett Reveals How The Precision Castparts Acquisition Unfolded, Gives Credit To Todd Combs For The Deal

Berkshire Hathaway Inc. BRK BRK announced on Monday that it would be acquiring aerospace equipment manufacturer Precision Castparts Corp. PCP in a $37.2 billion deal, paying $235 per share for the company in cash.
Investing legend and Berkshire chairman, Warren Buffett, was on CNBC recently to explain how the deal unfolded.

Todd Combs Founds The Company

"I have to give credit to Todd Combs for this deal," Buffett said. "We hired Todd about 5 years ago to manage money and he manages about $9 billion now. And maybe 3 or so years ago, he added precision to his portfolio and I really never heard about the company before that and Todd told me a lot about it. And so, over the last few years, I have become familiar with it."

Impressed By CEO Mark Donegan

He continued, "And about 5 or so weeks ago, the CEO Mark Donegan along with his CFO and IR person came by Berkshire, they were seeing a number of shareholders. And they met with Todd and then I dropped in on the visit in the last 15 minutes or so and I was very impressed by Mark and of course I have been impressed by the company. So, shortly thereafter I asked Todd to give them a call to see if they would be [...] if we made a bid."

'Indicated They Would Listen'

"And they didn't indicate they were particularly receptive, but they also indicated that they would listen. So, I subsequently made a bid. I met Mark out of Sun Valley, he actually was flying -- he is in the air most of the time -- and so, he came by because I was there for the Allen company (Allen & Co.) conference. And I made him a bid and he took it to the Board and before long we had a deal," Buffett concluded.