Big Island nut merger called off
Despite the deal's loss, ML Macadamia still wants to enter the nut processing business
Efforts by ML Macadamia Orchards LP to expand into processing and marketing took a step back yesterday. The company announced that a deal to acquire Mac Farms of Hawaii LLC for about $13.1 million has fallen through.
The deal, announced in October 2006 as a nonbinding agreement, would have helped Big Island-based ML Macadamia add the capacity of Hawaii's second-largest macadamia nut processor to its portfolio. ML Macadamia is the largest grower of macadamia nuts in the state, with 21.2 million pounds of wet, in-shell nuts produced last year.
"The deal had reached a point where it was not in the best interest of the shareholders," said Dennis Simonis, president and chief executive of ML Macadamia. He declined to give further reasons for the termination. Calls to Mac Farms for comment were not returned.
The company still wants to enter the processing and marketing business, he said. He would not say whether the company is pursuing other deals. Mac Farms, also based on the Big Island, markets macadamia nuts commercially and at retail under the brand names Mac Farms and Kona Select.
"It's disappointing, but we are not giving up," he said. "It's still going to happen somehow."
The cash and stock transaction had been expected to close early this year but ran into delays. Termination of the deal will not affect current production deals between the two companies, Simonis said.
He said in May that the acquisition would double the size of ML Macadamia since both companies -- with seasonal workers included -- have between 250 to 300 employees. Also canceled is a 20-year lease signed under the deal by ML Macadamia for the real estate and 15-acre processing plant used in the nut-processing operation by Mac Farms. ML Macadamia owns or leases 4,189 acres of orchards on the Big Island.
The combined company would have controlled 8,187 acres of the 18,000 total harvested macadamia nut acres in the state and just more than half of the volume in pounds produced in Hawaii last year.
The bid for Mac Farms came two years after ML Macadamia stopped an attempt by Hershey Co.-owned Mauna Loa Macadamia Corp., the state's largest nut processor and marketer, from buying Mac Farms over antitrust concerns.
Besides ML Macadamia, the other main processors are Mauna Loa, Hamakua Macadamia Nut Co. and Island Princess Macadamia Nut Co.
