Project Cherry: Major New Zealand Manuka Honey Producer
Opportunity Overview
Cherry is one of New Zealand’s pre–eminent honey producers
- FYJune’18 Rev: $US 14m, EBITDA: $US 5.6m; EBITDA margin 38%
- fully integrated operation on high growth tragedy
Cherry maintains bees and hives to extract honey and process both bulk and packaged formats for global markets
- 9,600 hives on leased and freehold property
- dedicated bee keeping, extraction and production facilities processing 360 tonnes of honey
- markets include China, Hong Kong, Japan, Australia, UK, continental Europe and the USA
Investment Thesis
Rapid revenue and earnings growth as a result of Cherry’s scalable platform
- sales are generated by its dedicated sales team selling its bulk and packaged product
- uses a dedicated procurement team to extract and source third party honey
- Cherry’s scalable structure is well placed to continue to service ongoing growth
Market position as one of New Zealand‘s leading honey producers supported by strong underlying demand fundamentals
- export value of New Zealand’s pure honey FY2017 was $315 million dollars with an estimated 19,885 tonnes produced
- honey export varietal have changed dramatically over the past 5 years with retail packs of Manuka Honey growing rapidly to meet the international demand.
Strong and identifiable barriers to entry support continued market leadership
- the scale of Cherry‘s integrated business model from bee keeping, extraction, processing, contract packing, packaging and distribution both local and internationally
Acquire the market leader in a growing sector for an attractive price
- management focused on increasing hive sites and processing throughput created further earnings growth
- fragmented market provides opportunity for Cherry to increase its share of the total honey market
Transaction Dynamics
Opportunity for an international trade party to a leading Manuka honey producer and exporter