Irvine-based Mauna Loa Macadamia Nut Corp. was gobbled up Thursday by Hershey Foods Corp., which paid $130 million to purchase the world's leading seller of the exotic nut from buyout firm Shansby Group.
San Francisco-based Shansby, which bought Mauna Loa for $40 million in September 2000, increased sales by an average of 30% a year since taking over the company, said partner Chuck Esserman. In the fiscal year ended June 30, Mauna Loa's sales reached $80 million.
"We buy companies with leading consumer brand names and strong growth opportunities, and we invest heavily in the marketing of those companies," Esserman said.
Shansby spent more than $10 million a year to expand Mauna Loa's retail presence, he said. In recent years Mauna Loa brought out products such as cookies and chocolate-covered macadamias and increased distribution through retail chains including Wal-Mart Stores Inc. and Costco Wholesale Corp., Esserman said.
Through its "Taste of the Tropics" ads, the firm "positioned Mauna Loa as a brand that could go beyond macadamia nuts," Esserman said. It also emphasized the supposed health benefits of macadamias.
Mauna Loa runs a processing plant in Hilo, Hawaii. The company, which started its original plantation in 1946, today gets its nuts from nearly 10,000 acres of orchards on the Big Island of Hawaii.
Company President Darrell Askey will continue running the operation for Hershey Foods, Esserman said.
In Thursday's trading on the New York Stock Exchange, Hershey shares eased 37 cents to $56.21.
Shansby, which was founded in 1987 and has more than $800 million under management, has invested in a number of Southern California companies over the years. Its current portfolio includes Don Miguel Mexican Foods Inc., an Anaheim-based maker of refrigerated and frozen food, and Meguiar's Inc., an Irvine-based maker of car wax.
Mauna Loa was Shansby's second sale in 2004, leaving the firm with eight companies in its portfolio. So-called private equity firms such as Shansby typically invest in companies whose shares are not publicly traded, aiming to sell them at a profit years later.
In February, Shansby sold Medtech Holdings Inc., which retails health and beauty care products such as Denorex shampoo and Cutex nail polish remover, to GTCR Golder Rauner, another private equity firm, for $240 million. Shansby spent $30 million to acquire Irvington-N.Y.-based Medtech in 1996.