Water Street Capital Inc. is a Jacksonville-based investment firm that has generally avoided the spotlight in nearly four decades of operation.
However, Water Street took the rare step – for the firm – of issuing a news release May 23 to announce it is taking on a Norway-based silicon products company that recently agreed to a buyout.
Water Street said it controls 8.26% of the stock of REC Silicon ASA and it intends to vote against “a significantly undervalued proposal” from its largest shareholder, South Korea-based Hanwha Solutions Corp., to buy all the shares of the company.
The firm said it intended to call an extraordinary general meeting to investigate REC Silicon’s dealings with Hanwha, and Water Street also intends to nominate new directors to REC Silicon’s board at its upcoming annual meeting.
Water Street was formed in 1987 by Gilchrist Berg and has kept most of its investment positions quiet.
Although he doesn’t talk about his business dealings, Berg has been active in supporting organizations in Jacksonville.
For example, in 2023, he made a donation to Jacksonville University to endow the position of Randall C. Berg Jr. College of Law Dean, in honor of his late brother.
A news release about the endowment by JU said Gilchrist Berg and his wife, Amy, have supported and served on the boards of organizations that include the Jacksonville Symphony, World Affairs Council of Jacksonville and the Cummer Museum of Art & Gardens.
However, Water Street gives very little information about the firm. Its website notes Berg’s founding of the company and not much else.
“Water Street Capital invests on behalf of its partners primarily in publicly traded companies across all industries. Investment decisions are based on proprietary research with a long-term perspective and a value orientation,” the website says, with nothing more.
Berg is not named in Water Street’s news release about REC Silicon or in a letter Water Street sent to shareholders.
The letter said Water Street affiliates began buying shares of REC Silicon in the fourth quarter of 2021 and has been gradually increasing its stake since then.
Although REC Silicon is headquartered in Norway, its manufacturing facilities are in the U.S.
The company operates one facility in Butte, Montana, but closed its other plant in Moses Lake, Washington, in December 2024.
REC Silicon reported revenue of $29.7 million in the first quarter this year and a net loss of $14.7 million from continuing operations.
Hanwha, which owns a third of REC Silicon’s shares, agreed to buy the rest for 2.20 Norwegian kroner each, a price that the company said was 28% higher than its closing price on the Oslo Stock Exchange April 24 before the offer was announced.
However, Water Street believes the company is worth more.
“The value of REC Silicon’s intellectual property greatly exceeds Hanwha’s indicated offer price for the entire company,” Water Street’s letter to shareholders said.
“The recently announced voluntary offer to buy all of the shares in REC Silicon by Anchor AS (a Hanwha entity) at a historically low price is, in our view, an unacceptable act by a responsible, controlling shareholder in a listed, public company, including threats that any remaining minority will be faced with a delisting of REC Silicon’s share and a compulsory acquisition thereof further contributes to our conclusion,” it said.
REC Silicon responded to the letter with a May 22 news release, before Water Street publicly announced its position. The release said it received a letter from shareholders owning more than 5% of its stock but it does not name Water Street.
“The Company is confident that all events and actions referenced in the shareholder letter were conducted in the best interests of all shareholders, the Company, and in accordance with applicable laws and regulations, however, the Company is bringing the request for an investigation to the shareholders as required by law,” it said.
REC Silicon said the company and the shareholders agreed to take up the matters at its June 25 annual general meeting, rather than calling an extraordinary general meeting as originally requested by Water Street.
Medtronic plc never reports specific sales data for its Jacksonville-based division, which makes surgical products for ear, nose and throat physicians.
But as the medical products giant reported results for the fiscal year ended April 25, CEO Geoff Martha said the ENT business reached a milestone.
“Two of our businesses, CAS (cardiac ablation solutions) and ENT, reached important milestones, entering the $1B annual revenue club, alongside 10 of our other businesses,” Martha said, according to a company transcript of its May 21 conference call.
It did not give any more information on ENT sales.
Ireland-based Medtronic had total revenue of $33.5 billion in the fiscal year, up 3.6% from fiscal 2024.
Medtronic has operated the ENT business since it acquired Jacksonville-based Xomed Surgical Products Inc. in 1999 for about $800 million in stock.
Xomed reported sales of $91 million in 1998 and $57 million in sales in the first half of 1999 before the acquisition.
Medtronic expanded the ENT business three years ago with a $1.1 billion acquisition of Intersect ENT, which makes sinus implants to treat patients with chronic rhinosinusitis.
The ENT business is part of Medtronic’s specialty therapies group, which reported revenue of $2.94 billion in fiscal 2025.
The economic outlook for the rest of this year may be uncertain, but CSX Corp. officials are remaining optimistic about the amount of freight the Jacksonville-based railroad company will be transporting.
“When we came into the year we were expecting a macro environment that was improving. We certainly can’t have a macro environment that falls off a cliff necessarily, and that’s not our expectation, and we’re not seeing that, just to be clear,” Chief Commercial Officer Kevin Boone said May 20 at Wolfe Research’s global transportation and industrials conference in New York.
“But we do think as the service, as the network becomes more fluid, as we gain speed on our network, that that will manifest into additional opportunities, and also, obviously help our cost structure as well,” he said.
CSX has been dealing with two major disruptions to its rail network in the Eastern U.S.
One is a planned closure of a 125-year-old tunnel in Baltimore for a modernization project that is expected to last most of this year.
The other disruption is the continued closure of a rail line in Tennessee to repair damage from Hurricane Helene in September.
A week before Boone’s remarks, Chief Financial Officer Sean Pelkey said at a Bank of America industrials, transportation and airlines conference that CSX missed out on about $1 million in potential revenue a day in the first quarter because of service disruptions.
“Call it roughly a hundred million dollars of revenue opportunity that we missed in the first quarter,” he said.
CSX reported revenue of $3.42 billion in the quarter.
Pelkey said operations are improving in the second quarter.
“We’re still not back up to where we would like to be. So we’re not missing a million dollars a day, but we are still missing a little bit of demand,” he said.
Pelkey said investors should still be confident in CSX.
“If you’re looking at CSX, you’re looking at one of the best-run railroads in North America. The team that produced that performance in 2022, 2023, 2004, it’s the same team that’s there today,” he said.
“We’re undervalued because we didn’t perform as well as we’d like in Q1, so it’s a great opportunity.”
A week after a Kraft Heinz Co. official said the company is investing $3 billion to upgrade its U.S. plants, including its Maxwell House coffee facility in Jacksonville, the company announced its management is evaluating possible strategic transactions.
“Over the past several months we have been evaluating potential strategic transactions to unlock shareholder value,” CEO Carlos Abrams-Rivera said in a May 20 news release.
Kraft Heinz gave no details about what the transactions could be or give a timetable for the evaluation process.
The Downtown Jacksonville plant at 735 E. Bay St. is the lone remaining Maxwell House plant in the U.S.
Pedro Navio, Kraft Heinz’s president of North America, told Reuters news service the company is spending $3 billion to upgrade its U.S. plants and the company confirmed the investments will include all 30 U.S. plants, including the Maxwell House facility.
Several financial news outlets reported in 2019 that Kraft Heinz was trying to sell off its Maxwell House business, but the company apparently stopped shopping the business when it couldn’t get the price it wanted.
Jacksonville-based Duos Technologies Group Inc. said May 20 that James Craig Nixon was appointed chairman of the board of directors.
Nixon is a retired brigadier general of the U.S. Army who has served on Duos’ board since 2021.
He retired from the Army after 29 years in 2011 and is currently CEO of Nixon Six Solutions, a growth and strategy advisory firm.
“Craig brings a distinguished track record of leadership and operational excellence from both the military and private sectors. His strategic mindset and business acumen will be invaluable as we continue scaling our data infrastructure and energy businesses alongside our established AI technology platforms,” Duos CEO Chuck Ferry said in a news release.
Nixon succeeds Kenneth Ehrman, who resigned from the board in April to focus on his pet safety company Halo Collar.