1992-02-28 Warren Buffett.H. H. Brown

Refer To：《1992-02-28 Warren Buffett's Letters to Berkshire Shareholders》。

H. H. Brown

We made a sizable acquisition in 1991—the H. H. Brown Company—and behind this business is an interesting history. In 1927 a 29-year-old businessman named Ray Heffernan purchased the company, then located in North Brookfield, Massachusetts, for $10,000 and began a 62-year career of running it. (He also found time for other pursuits: At age 90 he was still joining new golf clubs.) By Mr. Heffernan’s retirement in early 1990 H. H. Brown had three plants in the United States and one in Canada; employed close to 2,000 people; and earned about $25 million annually before taxes.

1991年我们做了一笔重要收购——H. H. Brown Company——而这门生意背后有一段有意思的历史。1927年，一位29岁的商人 Ray Heffernan 以1万美元买下了当时位于 Massachusetts 州 North Brookfield 的这家公司，并由此开始了长达62年的经营生涯。（他也为其他爱好挤出时间：90岁时他仍在加入新的高尔夫俱乐部。）到1990年初 Heffernan 先生退休时，H. H. Brown 在美国有三家工厂，在 Canada 有一家；雇员接近2,000人；税前利润每年约2,500万美元。

Along the way, Frances Heffernan, one of Ray’s daughters, married Frank Rooney, who was sternly advised by Mr. Heffernan before the wedding that he had better forget any ideas he might have about working for his father-in-law. That was one of Mr. Heffernan’s few mistakes: Frank went on to become CEO of Melville Shoe (now Melville Corp.). During his 23 years as boss, from 1964 through 1986, Melville’s earnings averaged more than 20% on equity and its stock (adjusted for splits) rose from $16 to $960. And a few years after Frank retired, Mr. Heffernan, who had fallen ill, asked him to run Brown.

在这个过程中，Ray 的女儿之一 Frances Heffernan 嫁给了 Frank Rooney。婚前，Heffernan 先生严厉告诫 Frank：最好把“给岳父打工”的念头彻底忘掉。这是 Heffernan 先生为数不多的错误之一：Frank 后来成为 Melville Shoe（现为 Melville Corp.）的 CEO。在他担任老板的23年里（1964至1986年），Melville 的股东权益回报率平均超过20%，其股票（已按拆股调整）从16美元涨到960美元。而在 Frank 退休几年后，Heffernan 先生病重，便请他来掌管 Brown。

After Mr. Heffernan died late in 1990, his family decided to sell the company—and here we got lucky. I had known Frank for a few years but not well enough for him to think of Berkshire as a possible buyer. He instead gave the assignment of selling Brown to a major investment banker, which failed also to think of us. But last spring Frank was playing golf in Florida with John Loomis, a long-time friend of mine as well as a Berkshire shareholder, who is always on the alert for something that might fit us. Hearing about the impending sale of Brown, John told Frank that the company should be right up Berkshire’s alley, and Frank promptly gave me a call. I thought right away that we would make a deal and before long it was done.

Heffernan 先生于1990年末去世后，家族决定出售公司——而我们在这里走了好运。我认识 Frank 有几年了，但关系还不够近，不足以让他把 Berkshire 当作潜在买家。他把出售 Brown 的任务交给了一家大型投行，而那家投行也没想到我们。但去年春天，Frank 在 Florida 与 John Loomis 一起打高尔夫。John 是我多年的老友，也是 Berkshire 股东，而且总在留意有什么生意适合我们。听说 Brown 即将出售，John 告诉 Frank 这家公司“很对 Berkshire 的胃口”，Frank 随即给我打了电话。我立刻觉得这笔交易能成，没过多久就办妥了。

Much of my enthusiasm for this purchase came from Frank’s willingness to continue as CEO. Like most of our managers, he has no financial need to work but does so because he loves the game and likes to excel. Managers of this stripe cannot be “hired” in the normal sense of the word. What we must do is provide a concert hall in which business artists of this class will wish to perform.

我之所以对这次收购格外热情，很大一部分原因在于 Frank 愿意继续担任 CEO。和我们大多数经理人一样，他并不需要为了钱而工作，但他之所以继续干，是因为他热爱这场“比赛”，也喜欢把事情做到出类拔萃。这类经理人并不能用通常意义上的“雇佣”方式获得。我们必须做的，是提供一座音乐厅，让这类商业艺术家愿意登台演出。

Brown (which, by the way, has no connection to Brown Shoe of St. Louis) is the leading North American manufacturer of work shoes and boots, and it has a history of earning unusually fine margins on sales and assets. Shoes are a tough business—of the billion pairs purchased in the United States each year, about 85% are imported —and most manufacturers in the industry do poorly. The wide range of styles and sizes that producers offer causes inventories to be heavy; substantial capital is also tied up in receivables. In this kind of environment, only outstanding managers like Frank and the group developed by Mr. Heffernan can prosper.

Brown（顺便说一句，它与 St. Louis 的 Brown Shoe 毫无关系）是北美领先的工作鞋与工装靴制造商，并且长期以来在销售与资产上都能赚到异常优异的利润率。鞋业是个艰难的行业——美国每年购买的约10亿双鞋中，大约85%依赖进口——行业里大多数制造商都经营得很差。由于生产商提供的款式与尺码组合极其繁多，库存往往很重；同时，应收账款也会占用大量资本。在这种环境里，只有像 Frank 以及 Heffernan 先生培养出来的团队那样卓越的管理者，才能做得好、做得久。

商业模式一般，需要重点考察Right People的关键因素：able and trustworthy，家族企业对trustworthy的影响比较大，足够长的时间才能在脑回路中跑出足够稳定的轨道。

A distinguishing characteristic of H. H. Brown is one of the most unusual compensation systems I’ve encountered—but one that warms my heart: A number of key managers are paid an annual salary of $7,800, to which is added a designated percentage of the profits of the company after these are reduced by a charge for capital employed. These managers therefore truly stand in the shoes of owners. In contrast, most managers talk the talk but don’t walk the walk, choosing instead to employ compensation systems that are long on carrots but short on sticks (and that almost invariably treat equity capital as if it were cost-free). The arrangement at Brown, in any case, has served both the company and its managers exceptionally well, which should be no surprise: Managers eager to bet heavily on their abilities usually have plenty of ability to bet on.

H. H. Brown 有一个显著特征：我见过的薪酬体系里，它算得上最不寻常之一——而且它特别合我心意。公司有一批关键经理人的年薪是7,800美元；在此基础上，再加上一项“指定比例”的利润分成——但这项利润必须先扣除一笔“已投入资本的费用”（charge for capital employed）后才能计算分成。因此，这些经理人是真正站在所有者的立场上行事。相比之下，大多数经理人口头上说得漂亮，却不愿真按所有者的方式去做；他们偏爱那种“胡萝卜很多、棍子很少”的薪酬体系（而且几乎总把股东权益资本当作“免费资金”）。无论如何，Brown 的这套安排对公司与经理人都极其有效——这并不奇怪：愿意在自己能力上重点下注的经理人，通常也确实有足够的能力值得下注。

* * * * * * * * * * * *

It’s discouraging to note that though we have on four occasions made major purchases of companies whose sellers were represented by prominent investment banks, we were in only one of these instances contacted by the investment bank. In the other three cases, I myself or a friend initiated the transaction at some point after the investment bank had solicited its own list of prospects. We would love to see an intermediary earn its fee by thinking of us—and therefore repeat here what we’re looking for:

令人沮丧的是：尽管我们曾四次完成由知名投行代表卖方的重大公司收购，但其中只有一次是投行主动联系了我们。其余三次，都是在投行已经按自己的方式去联系潜在买家之后，由我本人或朋友在某个时点主动发起并推动了交易。我们非常希望看到中介能通过“想到我们”来赚取应得的费用——因此我们在此再次重申我们想要的是什么：

1.Large purchases (at least $10 million of after-tax earnings),

大型收购（税后盈利至少1,000万美元），

2.Demonstrated consistent earning power (future projections are of little interest to us, nor are “turnaround” situations),

经证实的、持续稳定的盈利能力（我们对未来预测兴趣不大，也不对“扭亏为盈/重整”（turnaround）情形感兴趣），

3.Businesses earning good returns on equity while employing little or no debt,

企业能取得良好的股东权益回报率，同时几乎不用债或完全不用债，

4.Management in place (we can’t supply it),

管理层已在位（我们无法提供管理团队），

5.Simple businesses (if there’s lots of technology, we won’t understand it),

业务简单（如果技术含量很高，我们就看不懂），

6.An offering price (we don’t want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown).

给出一个要约价格（如果价格未知，我们不想浪费自己的时间，也不想浪费卖方的时间，即使只是初步聊一聊交易也不行）。

We will not engage in unfriendly takeovers. We can promise complete confidentiality and a very fast answer—customarily within five minutes—as to whether we’re interested. (With Brown, we didn’t even need to take five.) We prefer to buy for cash, but will consider issuing stock when we receive as much in intrinsic business value as we give.

我们不会进行敌意收购。我们可以承诺完全保密，并且会非常快速地给出答复——通常在五分钟内——告诉你我们是否有兴趣。（收购 Brown 时，我们连五分钟都用不上。）我们更喜欢用现金收购，但在我们“拿到的内在商业价值不低于我们付出的内在商业价值”时，也会考虑发行股票。

Our favorite form of purchase is one fitting the pattern through which we acquired Nebraska Furniture Mart, Fechheimer’s and Borsheim’s. In cases like these, the company’s owner-managers wish to generate significant amounts of cash, sometimes for themselves, but often for their families or inactive shareholders. At the same time, these managers wish to remain significant owners who continue to run their companies just as they have in the past. We think we offer a particularly good fit for owners with such objectives and we invite potential sellers to check us out by contacting people with whom we have done business in the past.

我们最喜欢的收购形式，是符合我们收购 Nebraska Furniture Mart、Fechheimer’s 和 Borsheim’s 时的那种模式：在这种情况下，公司的“所有者兼经营者”希望套现一大笔资金——有时是给自己，但更多时候是为了家族成员或不参与经营的股东。同时，这些经营者又希望自己仍然是重要股东，并继续像过去那样经营公司。我们认为，对于具有这类目标的所有者来说，我们能提供非常匹配的方案；并且我们邀请潜在卖家去“核实我们”，方法是联系那些过去与我们做过生意的人。

全资收购的主要目标是家族企业。

Charlie and I frequently get approached about acquisitions that don’t come close to meeting our tests: We’ve found that if you advertise an interest in buying collies, a lot of people will call hoping to sell you their cocker spaniels. A line from a country song expresses our feeling about new ventures, turnarounds, or auction-like sales: “When the phone don’t ring, you’ll know it’s me.”

Charlie 和我经常收到一些并购建议，但这些标的离我们的标准差得很远：我们发现，如果你公开表示想买一只 collies（苏格兰牧羊犬），就会有很多人打电话来，希望把他们的 cocker spaniels（可卡犬）卖给你。一句乡村歌曲恰好表达了我们对新项目、重整型交易或拍卖式出售的感受：“当电话不响的时候，你就知道那是我。”

Besides being interested in the purchase of businesses as described above, we are also interested in the negotiated purchase of large, but not controlling, blocks of stock comparable to those we hold in Capital Cities, Salomon, Gillette, USAir, Champion, and American Express. We are not interested, however, in receiving suggestions about purchases we might make in the general stock market.

除了对上述那类企业收购感兴趣之外，我们也对“协商谈判式”买入大额、但不取得控制权的股票块感兴趣——类似于我们在 Capital Cities、Salomon、Gillette、USAir、Champion 和 American Express 的持股。至于让我们在公开市场里按一般意义去买股票的建议，我们则不感兴趣。

1992-02-28 Warren Buffett.H. H. Brown

1992-02-28 Warren Buffett.H. H. Brown

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