Warren Buffett’s Berkshire Hathaway Inc. is betting on a service that helps companies including Ford Motor Co. and Daimler AG’s Mercedes-Benz provide live, in-car support to drivers.
Berkshire agreed to buy the assets of MyAssist Inc., a concierge and personal-assistant service, from Noel Group, according to a statement today from a unit of Buffett’s Omaha, Nebraska-based company. John Noel, founder and chief executive officer of Noel, will continue to lead the company.
“We do a branded product that allows our business customers to, in essence, be the superhero for their customers in solving day-to-day problems,” Noel said in an interview. For Mercedes-Benz, MyAssist provides personalized trip assistance from human attendants using “location-aware technology” from Verizon Communications Inc.
Automakers are racing to create connected cars as consumers increasingly demand their vehicles keep them constantly linked to their digital lives. In-vehicle technology is the top selling point for 39 percent of car buyers today — more than twice the 14 percent who say their first consideration is traditional performance measures like horsepower and speed — according to a December study by consulting firm Accenture.
The number of cars connected to the Internet worldwide will grow more than sixfold to 152 million in 2020 from 23 million now, according to researcher IHS Automotive.
Among MyAssist’s offerings is a call center staffed by operators. As computing power and connectivity increase, automakers are moving away from human-concierge services and toward technology that draws information into the car from the cloud, said Mark Boyadjis, an IHS Automotive analyst based in Minnetonka, Minnesota.
“I didn’t really see much life left in MyAssist, but clearly they’ve got more going for them if the Oracle himself is acquiring them,” Boyadjis said, referring to Buffett.
Noel said he plans to build the business “in a significant way” in the next year for both MyAssist and other products in development. One possible area for expansion could be sales to businesses outside the U.S., he said.
Noel Group also agreed to sell Insure America LLC, which provides insurance products to the travel industry, to Berkshire. The acquired businesses will add about 200 employees to Buffett’s company, Noel said.
The businesses will become part of Berkshire Hathaway Specialty Insurance, a commercial carrier that Buffett started last year after hiring four executives from American International Group Inc. MyAssist also works with insurers.
“We are approaching potential acquisitions strategically and thoughtfully as we build our business for the long term,” BHSI President Peter Eastwood said in the statement. “We believe MyAssist’s list of customers speaks volumes about the appeal of its products.”
Buffett, 83, built Berkshire into a $275 billion business over five decades through takeovers. He frequently highlights his willingness to retain managers after buying companies and empowers them to run their operations as they see fit. That’s made Berkshire a buyer of choice for many closely held businesses.
“I’ve always had an interest in being aligned with Berkshire,” Noel said. “It was my interest that brought about the discussion.”
Terms for the MyAssist deal weren’t disclosed. Noel said he agreed to sell, in part, because he admires Buffett’s commitment to give most of his wealth away to charity and example of working into one’s later years.
“I’m 65,” said Noel. “I know there’s no age discrimination at Berkshire.”
–Editors: Dan Reichl, Dan Kraut