It has been about two days since my favorite investor, Mr. Warren Buffett struck another acquisition super deal. This time he has made about 10% dent into the US$47 billion pile of cash his company Berkshire Hathaway has had on its hands by spending about US$4.5 billion for 60% stake in privately owned conglomerate Marmon Holdings Inc. (web: www.marmon.com)

It has also been reported, that this Buffett’s biggest ever investment outside of the insurance industry provides for Berkshire to acquire the rest of Marmon Holdings Inc. in progressive stages by 2014. So let’s just have a look at it a little closer.

Businesses of Marmon Holdings
Once again this company seems to fall neatly into traditional Buffett’s investing pattern easily complying with his rules for selection such as:

a) long tradition:
Marmon Holdings dates back to 1953 when its current owners, the Pritzker family, purchased an ailing manufacturer Colson Corporation.

b) continuous steady growth:
From its humble beginnings, Marmon evolved to multi billion organization which now operates over 125 independent business units in sectors such as Transportation Equipment Services, Construction & Industrial Components, Electrical Components and Retail Services (ie “boring” business segments just to Warren Buffett’s liking).

In 2006 Marmon Holdings employed in excess of 21,000 people in all parts of the globe and generated revenue in the vicinity of US$7 billion.

c) quality management:
Over the years of continuous business success the company still managed to stay privately owned by its founding Pritzker family. As its often the case in family businesses, they seem to have run pretty “tight ship” never allowing the costs of operation or company debts mushroom to levels which would severely the growth in Marmon’s bottom line.

d) good purchase price:
Valuing a company is always a tricky exercise even more so if the business is in private hands without much of the for public disclosure. As reported on their website, Marmon’s 2006 revenue reached US$ 6.98 billion (23.8% increase on 2005) and before tax income figure for the same year stands at about US$ 1.01 billion (pretty much in line with 2005).

The complete 3 years figures reported by Marmon’s are as follows:

So back of the envelope calculations seem to suggest that if Marmon’s keeps running its course for years to come (and the “boring” businesses seems to be able to do so for decades), Warren Buffett’s initial investment of US$4.5 billion should yield him about 60% of US$1 billion ie. US$600 million before tax.

That figure would suggest initial Return on Investment in the vicinity of 13.3% with a big potential for increase as Marmon’s keeps on growing its revenue and Berkshire keeps on purchasing the remaining portion of the company over the years.

Art of the deal Buffett style
Once again, Mr. Buffett has not disappoint the wide investing public with an ease and quickness he seemingly came up with this investment decision to allocate US$4.5 billion.

As reported, Buffett was first contacted about the potential transaction in the second week of December at a San Francisco election rally, following morning provided with a “phone book” sized document describing the The Marmon Group, read it on the plane back to Omaha and upon landing made the “we have a deal” phone call back to the Marmon’s banker.

And so it seems that Warren Buffett takes for his US$4-something billion purchases similar amount of time the regular folks spend on purchasing a fridge or washing machine.

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Arguably some of the best sources of value investing knowledge around are the annual pearls in the shape of Warren Buffett’s Letters to Shareholders of his investing vehicle Berkshire Hathaway.

However as some of you may realize, the humble beginnings of the World’s most successful asset allocator date back to late 1950 whereas the widely available Letters to Shareholders only report on Mr. Buffett’s investing adventures from 1977 onwards.

Effectively a vast pool of invaluable investing knowledge, provided in the annual letters of The Buffett Partnership (ie. Mr. Buffett’s humble beginnings in the pre-Berkshire investing era) and covering the years 1959 to 1968, is much harder to come by.

Yet, in my opinion, the strategies and information in them may be of much assistance to an average value investor, who is probably nowhere near to the available investing “float�? levels of Berkshire Hathaway hence unable to fully benefit from the knowledge gained through dedicated reading of the annual Letters to Shareholders.

As I see it, on the investing level, most of the value aimed investors (and their investing position) align much better against the investing profile of “early Buffett�? than with the billionaire philanthropist of today.

Realizing that, I took my time and read through all the Buffett Partnership reports and I must say, as all most of the Buffett’s writings, its an enjoyable reading indeed. And since, for some to me unknown reason, they were rather difficult to find, I decided to host them here for all my readers to enjoy and learn how its done.

Note: Should there be any issues with hosting the publicly available Buffett Partnership annual reports here please let me know. Thank you.

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I don’t normally post here any video clips and plan to keep it that way for most of the time, however today I would like to make an exemption by posting one of the latest Warren E. Buffett’s exclusive interviews with Charlie Rose.

The exemptions is well deserved as during this one hour interview Buffett’s expresses his views to some of the most troublesome issues of today. For example Buffett states his personal favorites for the 2008 US presidential race, explains his PetroChina investment in relation to the Darfour crisis, talks about the recent Rupert Murdoch’s bid for The Wall Street Journal and his possible interest in this asset, makes his point about the weapons of mass destructions and much more.