Manuka honey company sold for $36m

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Dennis Crowley

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frazzledfozzle said:
“Me Today director Stephen Sinclair will take on the role of King Honey general manager.”

wonder how much beekeeping experience he has
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They don't need beekeeping experience, they there to sell product and brand awareness, with their contacts perhaps they know a thing or to we don't, because we always thinking like a beekeeper and thinking about about bees.
 
R

Rob's BP

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Tauranga
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Marketer
Dennis Crowley said:
They don't need beekeeping experience, they there to sell product and brand awareness, with their contacts perhaps they know a thing or to we don't, because we always thinking like a beekeeper and thinking about about bees.
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Maybe, like some buyers of Manuka Health, which has been sold several times, and Good Health, Me Today is there to make things good and make a capital gain rather than buy & hold for the long term. If for capital gain, then profitability isn't the bee all & end all.
The other thing is that if Manuka honey is complimentary to their products/product line/retail strategy, then it could help their existing products increase profitability, thereby offsetting any possible losses on the honey side...
Or, yeah there could be several other scenarios.
 
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Alastair

Alastair

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Rather strange post. I just took another look through the thread and there has been a lot more business talked about than bees talked about.

Where you are coming from confuses me Scientia Sit Potentia :unsure:. Would you care to elaborate on that?

No need to hide, surely?
 
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Scientia Sit Potentia

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Alastair said:
Jarvis is a smart operator who already knew how to run a profitable business. Smart guys with insider knowledge also know when it's the right time to sell, and, how to jack the price. In this particular deal he certainly covered his bases every which way.

Me Today, well, let's just say they are running at a loss, and leave it there.

One thing in their favour, being in the "health and wellness" business, they may have inroads into that type of customer base, who will pay over the market for manuka honey.
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Many business plans include start up periods of loss making. Depending on the business and the scale and end game planned for, this period could be considerable. As long as it is planned and financed accordingly, I do not see the relevance of the comment?
Look at the backgrounds of the 'Me Today' directors? There is brand and business success written all over it.
 
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Alastair

Alastair

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True.

My own rough analysis is that based on the price paid it will be quite a few years of hard graft even to recover the purchase price. And of course with the honey market tanking, wether they ever recover the purchase price is mere speculation.

Scientia Sit Potentia you will no doubt recall a company from some decades ago called PC Direct. There are several parallels here.

PC Direct was started by 2 very young entrepreneurs at exactly the right time, when computers were a new and upcoming thing. The company went from nothing to huge in a very short time, and was a market darling. Right at the top, the directors sold it. Why? Cos they were insiders and understood market forces. All the same, the sale was hailed as a great success for the purchaser. Needless to say, PC Direct is no more.

Or perhaps you remember when Telecom sold the Yellow Pages.

Of course, there may be a strategic value in Me Today aquiring the business, it may meet demands they have for certain products, even if it will be some years before they actually make any money. It may be that which induced them to agree to the trems they have. However I speculate on that, not being in their board room I wouldn't know.
 
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S

Scientia Sit Potentia

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New Zealand
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Dennis Crowley said:
This is a generalization of course. is the honey market tanking or just consolidating to what is an actual real market for a product out there.
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Alastair said:
True.

My own rough analysis is that based on the price paid it will be quite a few years of hard graft even to recover the purchase price. And of course with the honey market tanking, wether they ever recover the purchase price is mere speculation.

Scientia Sit Potentia you will no doubt recall a company from some decades ago called PC Direct. There are several parallels here.

PC Direct was started by 2 very young entrepreneurs at exactly the right time, when computers were a new and upcoming thing. The company went from nothing to huge in a very short time, and was a market darling. Right at the top, the directors sold it. Why? Cos they were insiders and understood market forces. All the same, the sale was hailed as a great success for the purchaser. Needless to say, PC Direct is no more.

Or perhaps you remember when Telecom sold the Yellow Pages.

Of course, there may be a strategic value in Me Today aquiring the business, it may meet demands they have for certain products, even if it will be some years before they actually make any money. It may be that which induced them to agree to the trems they have. However I speculate on that, not being in their board room I wouldn't know.
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Tanking is a massive generalisation. There are honey companies booming that can't produce enough, there are some that are static and some that are failing. Global honey consumption continues to increase. It is where you are positioned in the industry and market that determines whether you are tanking or not. It definitely is not everyone.
 
Alastair

Alastair

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Tanking, consolodating, is semantics. Word play Dennis. Generalisation or not, prices are dropping.

To clarify tanking, I meant this and the next few years honey prices, as compared to the last few years prices. Because it is the last few years prices not current prices, that Jarvises to date profits have been based on.

So in regards to assessing future returns, tanking is a fair description. Saying prices are returning to historical norms is true, but irrelevant to this discussion. Because Jarvises earnings over the last couple of years are not based on longer term historical norms, they are based on the recent bubble. Which is now disintegrating. To what degree, remains to be seen.
 
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James

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I wonder what the annaul turnover of 'Me Today' is. $36 mill sounds like a lot of money ..... but it might be a drop in the ocean ..... If I was buying a business after the bubble has burst I'd want a pretty darn good deal. Might have been a bargain !
 
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James

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The other thought is, having just googled Me Today, and seeing the range of health care products marketed, why would you go and buy bee hives if you want honey . Sometimes it's a lot easier to just go and buy the stuff in a drum and concentrate on your core business of selling.
I think Airborne discoverd that quite a few years ago.
I remember the sleppless nights when I became the proud owner of my first 13 hives ...... 18,000 ...... those stress pills are gonna have to work real well !
 
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John B

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Tanked, shattered, collapsed are all far more accurate than,, a market adjustment. And if some companies can't get enough why aren't they buying it from people who have far too much. Things will get better but for now they are tough and that includes manuka. I saw a company advertising a 50% discount on their manuka today (it was still overpriced) I have seen mono floral manuka for sale in the supermarkets at prices that would mean a buy in price of about six dollars a KG.

We have poor production due to overstocking,
we have poor prices due to oversupply.
We have resistant varroa.
We have site payments that don't match current realities.
And we have an industry now controlled by people who couldn't tell a bee from a wasp.

From down here it looks more like the bottom of the well than the bottom of the tank.
 
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bighands

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James said:
Hmmm ..... I see longterm opportunity but don't fancy climbing in ...... but probably should.
The market is bottoming out, confidence is low, the bubble has run out of steam.
Needs a lot of hot air to inflate again .... probably needs a Gvt reshuffle to tweak the standard to align crop with North Cape, Taranaki and the East Cape so that it complies with out blending to ensure the producermakes a return on his investment.

`I would suggest it might be a job for my young fellah .....
Hold the faith young man.

I the meantime ..... I am happy hibernating...... rising like a slothfull bear in the mid morning after a night on the homebrew, and snoozing again in the warmth of the late afternoon, awaiting for the sun to rise above the mid way zenith before I climb up into that saddle of those five hundred horses and feel the thrill of the rush as they as they pull on the hills of the Divide.
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To "rob"our honey
 
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Alastair

Alastair

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James said:
I wonder what the annaul turnover of 'Me Today' is. $36 mill sounds like a lot of money ..... but it might be a drop in the ocean
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QUOTE - "Total gross revenue of the company for the year was $1.5m. After deducting the value of marketing services provided by a customer, total group revenue was $1.1m, a 102% increase on the prior year.
The company recorded an operating loss of $2.9m, an increase of $2.1m on the operating loss of $0.8m recorded in the prior year. Sales are expected to escalate over the 12 months to 31 March 2022 as the company continues to execute the Invest and Grow strategy. Based on the new distribution agreements achieved in FY21 and traction to date, gross revenue for FY22 is expected to be at least $3m".

 
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James

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Alastair said:
QUOTE - "Total gross revenue of the company for the year was $1.5m. After deducting the value of marketing services provided by a customer, total group revenue was $1.1m, a 102% increase on the prior year.
The company recorded an operating loss of $2.9m, an increase of $2.1m on the operating loss of $0.8m recorded in the prior year. Sales are expected to escalate over the 12 months to 31 March 2022 as the company continues to execute the Invest and Grow strategy. Based on the new distribution agreements achieved in FY21 and traction to date, gross revenue for FY22 is expected to be at least $3m".

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Hmmm ..... $1.1 m does'nt sound like a lot of revnue to go shelling out $36m on a honey co.
It's a bit like me buying the farm next door for $15 m ....... I'd be consigning the next three generations to a life of poverty and debt, unless I could find shareholders who wanted some free accomadation twice a year and somewhere to roar around on their motorbikes.

I have an intense dislike and distrust for these get rich quick schemes.
Enough said
I shall watch with interest.
 
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