August 15, 2018

Roc Partners and Wattle Hill have agreed to acquire Australia’s largest honey producer, Capilano Honey for A$190 million (US$137.5 million).

Roc Partners is a leading alternative investment manager that was created following the management buy-out of Macquarie Group’s private markets business by its senior team in 2014.

Forgoing a fund of funds structure to directly invest in agriculture and alternative investments, Roc bridges private equity with non-traditional targets.

Wattle Hill was co-founded by Albert Tse, the son in-law to former Australian prime minister Kevin Rudd. Through its offices in Sydney, Hong Kong, and Beijing, the fund focuses on investments in Australian businesses that answer to the trending demands of China’s growing middle class.

“Wattle Hill’s strong relationships in Asian markets provides an opportunity to unlock the potential of Capilano Group’s premium and therapeutic brands,” said Dr. Ben McKee, managing director of Capilano Honey.

Founded in 1953 by apiarists Tim and Bert Smith, Capilano Honey’s start began with packaging and selling honey to food retailers throughout Queensland. In the ensuing years, the company listed on the ASX in 2012 and has grown into one of the largest honey companies in the world, selling its products across Australia and in more than 30 overseas markets.

Now, ROC Partners, Wattle Hill, and Capilano Honey are viewing China as an opportunity for growth for Capilano’s premium and therapeutic product lines, and a path for scaling up the business.

A meeting of shareholders is scheduled to take place in November, where the deal, which offers each Capilano shareholder either $20.06 per share in cash, or a one-for-one share swap in the new owners, will need the support of a minimum of 75 percent of the vote to pass.

The company has unanimously voiced its recommendation that shareholders vote to accept the deal, with Capilano chairman Trevor Morgan saying, “The Board remains confident that Capilano is well positioned to deliver growth across its brand portfolio in both the domestic and export markets.”

“This growth, particularly our investment into our premium and therapeutic brands and marketing into the Asian region, will take time and involve execution risks. Therefore, we believe shareholders should have the opportunity to realise their Capilano shares in cash now.”

Major Capilano shareholder Wroxby Pty Ltd, which controls a 20.6 percent stake in the company, is signaling that its intention is to vote in favor of the deal in November, according to the company, and will be opting to receive scrip consideration in lieu of cash, guaranteeing that the minimum scrip requirement is met.

-Lynda Kiernan