C. Brewer to liquidate its assets
By Andrew Gomes
Advertiser Staff Writer
C. Brewer & Co. Ltd., one of Hawai'i's oldest companies, has decided to dissolve itself by selling assets piecemeal following a failed deal to sell the whole company last year.
The "plan of liquidity," formulated by the board of the private company based in Hilo, was approved last week, according to chairman and chief executive J.W.A. "Doc" Buyers.
Yesterday, shareholders received a roughly $51 million distribution of company cash in the first step of the plan. C. Brewer shareholders, who participated in a $202 million leveraged buyout of the company in 1986, have longed to cash out for some time. Most of the investors, including former executives, are in their 70s and have estate planning needs.
Buyers, who led the 1986 buyout, said it has been difficult for shareholders to trade their privately held stock. It also has been tough to sell
C. Brewer to a single buyer because of the company's diverse operations in agriculture, specialty foods, real estate, nutraceuticals and environmental products.
Buyers, a major shareholder whose employment contract expires in February, said he plans to keep the C. Brewer name alive by forming a new entity, C. Brewer Enterprises, and acquiring certain assets, including real estate, the company's Wainaku headquarters and possibly its frozen-juice subsidiary, Hawai'i's Own. He said he'd likely spend at least "eight figures" buying the assets.
Buyers said he would use the acquisitions to build assisted-living centers for the elderly, and a boutique hotel to help Hilo create a home port for a cruise ship.
Smaller real estate transactions are in escrow to others, he said, adding that full divesting of C. Brewer assets could take three to six years.
"This will not be a fire sale," said Robert "Bobby" Fujimoto, C. Brewer's senior board member and head of his family's HPC Building Supply Inc.
Fujimoto said an oversight committee of the board is to confirm all offers. It will be headed by Fujio Matsuda, a retired University of Hawai'i president.
About 500 employees stand to be affected by asset sales, though their fate will be in the hands of new owners. "There are no mass layoffs in (the liquidity plan)," Buyers said.
The planned asset sale does not involve HT & T, a major Big Island trucking company previously known as Hilo Transportation and Terminal; Brewer Environmental Industries; or Hilo Coast Power Co., an independent electrical producer at Pepe'ekeo that sells power to Hawai'i Electric Light Co.
C. Brewer owns or controls about 70,000 acres on Maui and the Big Island. Subsidiaries include Mauna Kea Agribusiness Inc., Wailuku Agribusiness Inc. and Hawai'i's Own. The company is also general partner of ML Macadamia Orchards LP, a publicly traded partnership.
Strother Timberlands Ltd. of Troy, Ala., offered $160 million for the company last year, but terminated the deal and sued, alleging that C. Brewer tried to manipulate the purchase price. The suit was settled in an arrangement that involved Strother buying some C. Brewer land.
"This is an old, complicated company," Buyers said. "It's hard to sell without giving a lot of representations and warranties."
Fujimoto said the decision to sell individual company assets was a "natural evolution" after the Strother deal fell through. All shareholders who voted, representing 96 percent of company stock, supported the plan.
Shareholders hold about 5.1 million shares valued at about $32 each for a total value of $163 million, according to Buyers. The company is debt-free after finishing paying off a $60 million loan last year that helped finance the buyout.
Last year, C. Brewer sold affiliated companies Hawaii Coffee Co. Inc., Mauna Loa Macadamia Nut Corp. and Ka'u Agribusiness Co. Inc.
There is no estimate of the total value of C. Brewer assets, Buyers said. How much shareholders gain will depend on aggregate asset sales.
C. Brewer is one of Hawai'i's original Big Five companies and the oldest still operating in the state. It started in trading, then got into whaling, sugar, macadamia nuts, agriculture consulting, real estate, power generation, stevedoring, trucking, nutraceuticals and other industries.
Buyers said the company's next evolution from diversified agribusiness to senior living and tourism represents just another change.
"C. Brewer has changed its stripes many times since 1826," he said. "That's how we've survived all these years — because it was willing to change.
"I want to save the company. We will have to change our stripes one more time and carry it into the 21st century."
Advertiser Big Island reporter Hugh Clark contributed to this report.
