Berkshire Hathaway to acquire Xtra for 1.24 times revenue

Weekly Corporate Growth Report, Aug 6, 2001

The Deal: Berkshire Hathaway Inc. has agreed to purchase Xtra Corp. for $590 million. After news of the acquisition was announced, shares of Xtra gained $2.42 to $54.72, and Berkshire shares rose $1,600 to close at $69,200.

Discussion: Xtra leases over-the-road trailers, intermodal or piggyback trailers, chassis for container transport, and domestic and marine containers. Clients include railroads, shipping lines and trucking companies worldwide. The company leases about 275,000 units of equipment through both short and long-term agreements and operates about 90 equipment storage and distribution facilities in North America.

Berkshire Hathaway is the investment holding company of billionaire investor Warren Buffett. The company primarily operates property/casualty insurance and reinsurance through subsidiaries National Indemnity, GEICO and reinsurance giant GeneralCologne Re, among others. Berkshire also owns stakes in gems, candy, pilot training and shoes. The firm also has significant stakes in American Express, Coca-- Cola, Gillette, The Washington Post Company, Wells Fargo and MidAmerican Energy.