Buffett Truck-Stop Deal Is Driven by Bet on Growth -- WSJ
Warren Buffett's conglomerate takes initial 38.6% interest in truck-stop operator
By Nicole Friedman
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 4, 2017).
Warren Buffett's Berkshire Hathaway Inc. made a bet on American truckers with a deal on Tuesday to acquire nearly 40% of the operator of Pilot and Flying J travel centers.
The investment in Pilot Travel Centers LLC, better known as Pilot Flying J, is Berkshire's latest wager on traditional forms of transportation and U.S. economic growth. The Omaha, Neb., conglomerate already owns BNSF Railway, auto-dealership group Berkshire Hathaway Automotive, car insurer Geico and private-jet company NetJets.
"There will be more goods moving to more people as the years go by in the United States -- that I would bet a lot of money on," Mr. Buffett, Berkshire's chairman and chief executive, said in an interview.
Pilot Flying J is one of the largest private companies in the U.S. The Knoxville, Tenn.-based family-owned company has 750 locations in the U.S. and Canada, offering truckers a place to refuel, eat and shop.
The company said it generates more than $20 billion in annual revenue and employs 27,000 people.
Pilot has a dominant position in a market with few players, similar to some of Berkshire's other large operating businesses. Regulations and local politics can make it difficult to build new truck stops, even amid high demand, analysts said.