Mac Farms of Hawaii LLC merger signed
ML Macadamia Orchards L.P., the world's largest grower of macadamia nuts, said yesterday it has signed an agreement to acquire rival Mac Farms of Hawaii LLC in a deal worth about $8.5 million.
Mac Farms owns the second-largest macadamia nut processing facility in Hawai'i. The two companies originally announced plans to merge in October.
ML Macadamia Orchards will acquire all of Mac Farms' farming equipment, brands and trademarks in return for 650,000 company shares. Also, under the agreement, ML Macadamia will lease a processing plant owned by Mac Farms and a nearly 4,000-acre orchard owned by Kapua Farms, a Mac Farms affiliate.
"The synergies we expect from the combination of these assets and expertise should provide new growth opportunities and enhanced value to our unit holders and help restore Hawai'i's position as a global leader in the macadamia industry," said Dennis Simonis, president and chief executive officer of ML Macadamia Orchards.
The agreement follows other recent industry events such as the 2004 purchase of Mauna Loa Macadamia by Hershey, Pa.-based Hershey Foods Corp. for $112.4 million and the assumption of $17.6 million in debt. That sale came just weeks after Mauna Loa abandoned its own bid to buy Mac Farms.
Mauna Loa's bid was opposed by ML Macadamia and maca-damia nut grower and processor Hamakua Macadamia Nut Co. Inc. on grounds the sale would create a macadamia processing monopoly.
ML Macadamia Orchards is the world's largest grower of macadamia nuts, owning or leasing 4,189 acres of orchards. All of its orchards, assets and employees are based on the island of Hawai'i. The Big Island is the second-largest producer of macadamia nuts in the world. About 650 nut growers on the island produce a crop worth about $47 million for local farmers.
The deal is subject to Securities and Exchange Commission approval and is expected to close in October. Shares of ML Macadamia Orchards fell 3 cents yesterday to close at $5.41.