Family beekeeping business sells to industry giant for $6m
AN EVANS Head family-owned beekeeping business has earned a $6 million payday after being acquired by Australian honey giant Capilano.
KirksBees Honey is one of Australia's biggest producers of active Manuka honey.
Manuka honey is a product whose fortunes have skyrocketed in recent years with the rise in health product consumerism.
Unlike regular honey, active Manuka is prized for its antibacterial properties, which are clinically proven to heal skin problems, wounds and stomach ulcers, as well as boost immunity.
As a result, it fetches at least double the price of everyday honey and with much bigger profit margins it is transforming the honey market.
That's why Capilano's decided to acquire of the local business, according to Capilano spokesman Dirk Kemp.
"The market for Manuka honey has grown and it is short in supply," Mr Kemp said.
"(KirksBees) were one of our biggest suppliers.
"We basically purchased all of the honey that they produced."
While it's a huge pay off for KirksBees - who were paid $5.25 million for the business plus $750,000 for the property and land - Capilano's bold buy was very good for its shareholders too.
The company's stock price has shot up from $12 to more than $16 in the last month.
Mr Kemp said Capilano was purchasing about 450 tonnes of Manuka honey each year - about 80% of Australia's entire production - and $2 million of that was sourced from KirksBees.
He said over the last two to three years the demand for the product had started to rise dramatically off the back of smart marketing from its birthplace in New Zealand.
"They have grown their supply over there - doubled it over the last few years - and that's hopefully what we want to do here," he said.
"It's a high value product and it's low in supply."
Manuka trees, the flowers from which the bees create the special honey, are a species of tea tree common in New Zealand and south-eastern Australia.
The owner of KirksBees was under a confidentiality agreement as part of the sale and was unable to be reached for comment.