A decade ago Terry Jarvis faced a dilemma. His sprawling avocado orchard in Northland needed pollinating but no one would lend him any beehives because the season coincided with flowering manuka, which was taking off.
So he went out and bought 500 hives of his own. A few years later Jarvis sold his avocado orchard but decided to keep those 500 hives. He was determined to get into the honey business and set about developing what would soon become the country’s third-largest manuka honey producer – King Honey.
Those first 500 hives quickly became about 20,000 and Jarvis found himself and his 30 staff breeding approximately 16,000 queen bees a year and running a business turning over $30 million annually.
Fast forward to today and Jarvis has just sold the business to Me Today, a fledgling NZX-listed health and wellbeing product company founded by the Business Bakery duo Grant Baker and Stephen Sinclair and Michael Kerr.
The deal will see Me Today acquire King Honey for $36m, including $21m in cash and $10m in shares to Jarvis issued at 8.8c each.
Me Today last week launched a capital raise to help fund the acquisition and confirmed it has received commitments for $10m of new shares from a range of financial market participants and wholesale investors.
The company plans to raise $15.75m in total with the balance sought from existing shareholders.
The deal – subject to shareholder approval – represents a watershed moment for Me Today, whose short life as a listed company has evolved around marketing of health products such as skincare, vitamin and mineral supplements.
It uses the likes of All Blacks star Beauden Barrett and cyclist Sarah Walker as brand ambassadors.
Acquiring King Honey seems a logical step given the overlap in the two company’s products in the “health and wellness” category.
Jarvis is no stranger to breaking new ground having introduced – with Craig Heatley – Sky Television to the New Zealand market.
And while part of the decision to sell up was driven by an overdue retirement, he still has enough skin in the game to take an active interest in the new business.
“It’s a really good deal for both companies,” Jarvis told the Herald.
“When you sell a business you always like to sell it to good people with high integrity and they are. And it’s good to keep it in New Zealand because we have a lot of relationships with New Zealand landowners and local iwi and so we are really pleased with the outcome.
“I would say the Me Today range will fit in with the honey range. It’s a very similar buying bench for both products. It gives us more grunt to go into offshore markets and have a bigger story.
“Grant Baker and Stephen and the team are very strategic thinkers and there’s a lot of upside for us as they bring all the skill from the sales side.
“So it’s a good marriage. Neither side is unwieldy and the growth is all before us.”
Baker said the acquisition will enable Me Today to expand its existing lifestyle, health and wellness businesses.
“Terry has created an impressive manuka honey business which is well established to provide a platform for future growth”.
Jarvis said his honey production wasn’t severely impacted by Covid-19 but last year’s weather was bad for business.
“From a production point of view we’ve been fine. This year was a difficult one for honey production because of the weather. But prior to that we did close to 380 tonnes and with an expansion of our bee interests that will increase that in normal years to over 400.
“Covid had some impact on revenue because we were connected to some retail outlets offshore but we’re downstream on that now with Me Today and their expertise on offshore markets we see that as very positive.”
During the nationwide Covid-19 lockdown, the business continued to operate as an essential service and since lockdown has retained all of its staff.
King Honey currently has a network of 18,000 beehives across the North Island and in Marlborough generating revenue of $16.5m in the year to March 31 and Ebitda (earnings before interest, tax, depreciation and amortisation) of $3.87m.
It is expecting revenue of $21.5m in 2022 and Ebitda of $5.26m.
Jarvis said he is looking forward to settling down after a long career in business. The keen horse racing enthusiast is also looking forward getting over to Australia to check out the thoroughbred industry.
“I’ve got a few but mostly slow ones.”
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