Australian company snatches up MacFarms
Buderim Ginger buys the macadamia nut processor for $5 million
If MacFarms of Hawaii LLC
had a price tag, it might say "half off."
Hawaii's second-largest macadamia nut processor has again been purchased by an Australian company, this time for less than half the $13.1 million Hilo-based ML Macadamia Orchards was offering for it less than a year ago.
Buderim Ginger Ltd. said yesterday it bought MacFarms for $5 million plus $700,000 in a deferred cash payout or issue of shares.
Under the deal, expected to close Monday, the company also signed long-term leases on the nearly 4,000-acre macadamia orchard owned by Kapua Orchard Estates LLC, an affiliate of MacFarms. A tentative agreement was announced July 1.
A call to MacFarms' Captain Cook-based headquarters was directed to Buderim.
The buyout will help boost Buderim's 2008 pre-tax earnings by an undisclosed amount to a total of $3 million, up from a profit of $900,000 a year earlier, the company said.
It is Buderim's first U.S. macadamia nut operation. In December the Queensland-based food company bought Agrimac, Australia's third-largest producer of macadamia nuts. Buderim said the MacFarms purchase could make it the largest processor and marketer of macadamia nuts in the world.
"The long-term demand for macadamia nuts internationally is very good," Chief Executive Gerard O'Brien said in an interview. "Obviously we've already got a macadamia business operation -- Hawaii is different to Australia in terms of its agricultural conditions, but we can bring a lot of expertise and support to the business."
Buderim will likely expand the company's peak-harvest staff of 100 workers, O'Brien said. MacFarms employs about 40 workers year-round. The company's four-person management team also will stay on, he said.
Big Island macadamia grower David Rietow, who is also president of the Hawaii Macadamia Nut Association, said the buyout won't help the state's 30 primary independent growers.
"It doesn't do anything for the local Hawaiian industry at all," he said. "This is the third season they haven't purchased from local growers."
Rietow said MacFarms, which bought from hundreds of local growers less than five years ago, now contracts primarily through ML Macadamia, Hawaii's largest macadamia grower. ML Macadamia ended an 18-month effort to acquire MacFarms in December.
"Historically, MacFarms has had relationships with independent growers and we would be keen to start reinstating those as we go forward," O'Brien said.
MacFarms was purchased by Australian-based Arnott's Biscuits Holdings in 1986 from its original owners, a local partnership that formed the company in 1981.
In 2003, California-based Blue Diamond Growers, the world's largest tree nut processing and marketing company, sold MacFarms to Memphis-based Sparks Corp. and Greater Pacific Food Holdings Inc.