AVCJ Awards 2019: Exit of the Year - Mid Cap: Manuka Health

When Pacific Equity Partners (PEP) put New Zealand premium honey producer Manuka Health up for sale in October last year, there was reason to expect global interest. The company’s core product, a regionally unique strain of honey with scientifically demonstrated health benefits, had found a market in 47 countries, including in North America and Europe.

There was a distinct effort to gear the proceedings toward Asia, however, with the multi-stage auction process stressing that the region would be the company’s next theater of growth. It came as no particular surprise then, when Malaysian conglomerate Hong Leong won the day. Financial terms were not disclosed but sources suggest a return multiple of about 3x for PEP, which implies an IRR of 44%.    

“The new owners understand the tremendous natural health properties of Manuka honey and they are committed to supporting this great New Zealand company as we continue to forge major steps forward on the global stage, across all aspects of the business over the years ahead,” John Kippenberger, Manuka Health’s CEO said at the time. “This acquisition is further international recognition of the future growth prospects of quality New Zealand Manuka honey on the global stage.”

Recruitment of Kippenberger, formerly of George Westin Foods, helped set the stage for this transition. As one of three owners of Premier Beehive NZ – one of the country’s biggest deli meats producers – he helped bring a new level of professionalism to a cottage industry that typically never sees a business get larger than 1,000 hives. Under PEP, Manuka Health had 20,000.

PEP’s attention to environmental, social, and governance upgrades, which earned AVCJ’s 2018 prize for responsible investment, confirmed the adage that sustainability improvements beget financial progress. All this required the entire investment cycle to be premediated with a long-range and high-concept vision for wellness honey as a project beyond the scope of the company itself.

“Manuka Health was still operating very much in a start-up mentality, still focused on getting products to its customer rather than looking at the big picture,” Evan Hattersley, a director at PEP, told AVCJ last year regarding the company’s relatively modest profile at the time of investment. “It didn’t have the management bandwidth to think about things like the broader industry.”

Pictured: Jake Haines of Pacific Equity Partners accepts the Exit of the Year - Mid Cap award

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• Topics
• Australasia
• Trade sale
• Consumer
• Australia
• Pacific Equity Partners
• AVCJ Awards
• ESG