With Warren Buffett's Berkshire Hathaway (BRK.A -0.36%) (BRK.B 0.11%) weighing in at the end of the first quarter with an all-time record $137 billion in cash, cash equivalents, and marketable securities, it was only a matter of time before the Oracle of Omaha made a move. Over the holiday-lengthened weekend, it finally happened.

After making Berkshire Hathaway's last acquisition almost 4.5 years ago (Precision Castparts), it was announced Sunday afternoon, July 5, that Berkshire Hathaway affiliate Berkshire Hathaway Energy would acquire an assortment of natural gas transmission and storage assets from Dominion Energy (D -1.21%) in an all-cash deal valued at $9.7 billion, which includes the assumption of $5.7 billion in debt.

An assortment of pipelines leading to individual storage tanks.

Image source: Getty Images.

The tangible assets being acquired for $4 billion include Dominion's full stakes in Dominion Energy Transmission, Carolina Gas Transmission, and the Questar Pipeline, along with Dominion's 50% stake in the Iroquois Gas Transmission System. All told, this works out to more than 7,700 miles of natural gas transmission pipeline and gives Berkshire Hathaway control of 18% of the United States' interstate natural gas transmission, up from 8% prior to this deal.

Berkshire Hathaway Energy also gains 900 billion cubic feet of storage and a 25% stake in liquefied natural gas (LNG) export, import and storage facility Cove Point in Maryland. Dominion will retain a 50% ownership stake in Cove Point, with Brookfield Asset Management owning the final 25% stake.  The press releases from both companies estimate the deal closing during the fourth quarter.

Now that Buffett has come out of acquisition hibernation, here are the five most important things you need to know following the Dominion deal.

Berkshire Hathaway CEO Warren Buffett at his company's annual shareholder meeting.

Berkshire Hathaway CEO Warren Buffett at his company's annual shareholder meeting. Image source: The Motley Fool.

1. Buffett is a big fan of cash cows

First of all, let's just say that this purchase is vintage Buffett. Although he's reiterated on numerous occasions that he's angling for elephant-sized deals, he'll never turn down an acquisition opportunity (for the right price) that improves an existing economic moat or bolsters his cash flow. In this situation, the Dominion Energy asset deal more than doubles Berkshire Hathaway Energy's interstate natural gas transmission market share.

According to a report put out by the U.S. Energy Information Administration last year, natural gas is expected to grow from 34% of total electricity generation in 2018 to 39% by 2050, with LNG exports nearly tripling by 2040 from 2018 levels. In other words, Buffett donned his long-term binoculars and saw a path to steady fee-based revenue over the long run. 

A person holding a magnifying glass over a balance sheet.

Image source: Getty Images.

2. He prefers businesses that have hard assets

One thing you'll consistently note about Warren Buffett is that when he chooses to acquire a business, that business will often have plenty hard assets. This is to say that the company being acquired has tangible equipment, including factories, facilities, or pipelines, and/or products that he can feel or see in action.

You see, Buffett is an old-school investor who's been analyzing businesses since the ripe old age of 11, which is when he bought his first stock. Back when Buffett was learning about valuing businesses, and even throughout the lion's share of his investing career, there weren't many asset-light business to analyze. By asset-light I'm referring to businesses whose intellectual property, software, or virtual services are the prime asset determinant. Put simply, Buffett really doesn't seem to understand how to value asset-light companies, which could explain his aversion to tech stocks.

However, as long as hard-asset businesses exist (and there are still plenty), Buffett will have plenty of research to conduct.

A judge's gavel lying atop a petition to file for bankruptcy.

Image source: Getty Images.

3. The Oracle of Omaha loves a crisis

Make no mistake about it, Warren Buffett loves to make acquisitions during times of fear and panic. It's perhaps the hallmark of his investment career, and one of the reasons he's made such a boatload of money over the past five decades.

Though Buffett was harped on by Wall Street and retail investors for not doing more during the coronavirus crash during February and March, he's shown that being picky isn't necessarily a bad thing. With the oil and gas sector going through an historic rough patch that's seen more than 20 North American producers file for bankruptcy protection in 2020, and Dominion Energy wanting to focus its attention on its utility operations, Buffett seized the opportunity to make a deal on terms that were favorable to Berkshire and its shareholders. 

If a crisis rears its head, there's a good chance you can count on Warren Buffett to eventually strike.

Ben Franklin's eyes peering between a messy stack of one hundred dollar bills.

Image source: Getty Images.

4. Berkshire Hathaway still has a ton of cash

Fourth, you should understand that while this is a $9.7 billion deal, it's hardly even put a dent into Berkshire Hathaway's cash coffers. In fact, it's not out of the question that Berkshire Hathaway's cash balance actually increases, in spite of this deal.

Although we won't know the full story of what Buffett and his team have been up to until the mid-August filing of the company's 13F with the Securities and Exchange Commission, Buffett did produce a slide during Berkshire Hathaway's virtual annual shareholders meeting in May that showed $6.1 billion in net equity sales during the month of April. This selling activity was primarily the result of Berkshire dumping its holdings in all four of its airline stocks.

Thus, even with a $9.7 billion deal headed for completion during the fourth quarter, the cash raised from selling Berkshire's airlines, along with expected profits and dividend income from other owned businesses, could push the company's coffers beyond $137 billion again sooner than you realize.

Two businessmen in suits shaking hands, as if in agreement.

Image source: Getty Images.

5. This won't be Buffett's last deal

Finally, don't count on Buffett sitting out another 4.5 years before making a deal. While there was an extraordinarily long gap between Buffett's latest and previous acquisition, this was probably more of an anomaly than a trend. Buffett's acquisition history shows that he's a fan of making bolt-on, earnings-accretive deals with regularity.

What might come next for Berkshire Hathaway? Though tech stock valuations have ascended to the heavens, most financial stocks, including banks, have been pulverized with the Federal Reserve choosing to keep its federal funds rate at a record low and the coronavirus hampering the economic recovery. Since financial institutions are trading at valuations that haven't been seen in years, or perhaps since the financial crisis more than a decade earlier, it wouldn't be surprising if Buffett looked for an elephant-sized deal in his favorite sector.

In my mind, there's no question that Buffett is already thinking about what his next deal might be.