Shansby bids aloha to Mauna Loa

San Francisco’s Shansby Group is selling the macadamia nut company to chocolate giant Hershey Goods for slightly more than $112 million.

San Francisco-based branded consumer goods investor The Shansby Group has agreed to sell Mauna Loa Macadamia Nut to Hershey Foods in a deal worth $112.4 million (€85 million).

Hershey’s acquisition of Hawaii-based Mauna Loa will include the assumption of about $17.6 million in debt and is expected to close sometime before the end of the year.

Shansby had originally acquired all the stock of Mauna Loa back from C. Brewer and Co. back in 2000 for an undisclosed amount. C. Brewer had owned the company since 1974 and had decided to sell to provide liquidity to some of its investors.

According to an interview with Shansby managing director Jim O’Hara back in October,   Shansby has spent the last four years trying to develop Mauna Loa’s cache of products beyond just macadamia nuts: For example, it recently launched its line of pure gold macadamia nut oil.

Pennsylvania-based Hershey is buying into the macadamia nut companies at time when low-carb and Atkins’ diets, advocating high-fat foods containing healthy oils, are all the rage. Indeed, Mauna Loa markets its products as “loa carb”.

Mauna Loa has annual sales of approximately $80 million and an estimated 40 percent market share in macadamia nuts, which have become popular with these low-carbohydrate diets.

Shansby’s journey to an exit with Mauna Loa has been nothing short of nutty. After being purchased by the firm, the nut distributor was hit by a lawsuit by macadamia grower ML Macadamia Orchards, after Mauna Loa had refused to buy 1.8 million pounds of unusable nuts. The grower ended up winning the case to the tune of more than $1 million.

Most recently, Mauna Loa was in negotiations to buy out its nearest rival, MacFarms of Hawaii, but the deal failed due to concerns about creation of a monopoly.

Founded in 1987, The Shansby Group currently has more than $800 million in capital under management. The firm invests exclusively in branded consumer product companies. Some of Shansby’s more well-known brands include Terra Chips and Glaceau VitaminWater. In February, the firm announced the sale of Medtech Holdings, a marketer and distributor of branded health and beauty care products, to Chicago’s GTCR Golder Rauner.