Robert Celt
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Leader in food products joins leader in ingredients
Manitoba has long been home to the two largest hemp food companies on the continent and now they have joined forces to make an even stronger push to get hemp foods into more North American households.
Winnipeg's Manitoba Harvest, a subsidiary of Compass Diversified Holdings, has acquired Hemp Oil Canada, Inc. (HOC) for $42 million.
Last summer, Connecticut-based Compass acquired 87 per cent of Manitoba Harvest for $132.5 million.
Both companies are dominant leaders in their respective markets -- Manitoba Harvest in branded hemp foods and HOC in the hemp-ingredient field. Each of them command about 65 per cent of the North American market.
Mike Fata, the CEO of Manitoba Harvest (who along with other partners still retains 13 per cent equity in Manitoba Harvest) said the deal is something that was in the works for some time.
"We see lots of opportunities, whether someone buys Hemp Hearts and eats them out of the bag or buys a loaf of bread with hemp seed in it, we want to be that offering to all consumers," he said.
Shaun Crew, one of the founders of HOC along with his two partners, will remain the head of HOC.
The company just completed a new 35,000-square-foot processing facility in Ste. Agathe that will allow the company to increase its production by up to 600 per cent.
"We have been friendly competitors for years," Crew said. "This is something that we both expected to come to fruition at some point in the future."
HOC had revenue of about $18 million last year, and the combined companies will now do about $75 million in total, with about 150 employees.
Alan Offenberg, CEO of Compass, said, "Following our acquisition of Manitoba Harvest in July, we are pleased to make this accretive add-on acquisition, which will further drive Manitoba Harvest's already strong growth trajectory."
Fata said Compass shared the same vision both he and Crew have about hemp as "an everyday household food item that people just don't know about yet."
Both companies began operations in 1998 when Health Canada re-legalized the cultivation of industrial hemp.
The market research suggests hemp food products are only in about three per cent of Canadian households and less than one per cent of American households.
Both believe there is plenty more business for the companies to capture.
HOC has about 400 customers now who buy its range of hemp ingredients from hemp seed oil to hulled or toasted hemp seeds to protein, flour and hemp coffee.
Manitoba Harvest ships its branded products such as Hemp Hearts, bars and proteins to about 7,000 stores in Canada and the U.S.
Manitoba Harvest is currently in the midst of defending itself against an unfair labour action brought against it by some workers who were laid off after an unsuccessful union certification drive.
Fata said the layoffs occurred after the company invested about $10 million in new automation technology that meant it could decrease production from seven to five days a week and still meet customer demand.
News Moderator: Robert Celt 420 MAGAZINE ®
Full Article: Manitoba: Hemp Firms Fire Up $42-M Merger
Author: Martin Cash
Contact: Winnipeg Free Press
Photo Credit: None found
Website: Winnipeg Free Press
Manitoba has long been home to the two largest hemp food companies on the continent and now they have joined forces to make an even stronger push to get hemp foods into more North American households.
Winnipeg's Manitoba Harvest, a subsidiary of Compass Diversified Holdings, has acquired Hemp Oil Canada, Inc. (HOC) for $42 million.
Last summer, Connecticut-based Compass acquired 87 per cent of Manitoba Harvest for $132.5 million.
Both companies are dominant leaders in their respective markets -- Manitoba Harvest in branded hemp foods and HOC in the hemp-ingredient field. Each of them command about 65 per cent of the North American market.
Mike Fata, the CEO of Manitoba Harvest (who along with other partners still retains 13 per cent equity in Manitoba Harvest) said the deal is something that was in the works for some time.
"We see lots of opportunities, whether someone buys Hemp Hearts and eats them out of the bag or buys a loaf of bread with hemp seed in it, we want to be that offering to all consumers," he said.
Shaun Crew, one of the founders of HOC along with his two partners, will remain the head of HOC.
The company just completed a new 35,000-square-foot processing facility in Ste. Agathe that will allow the company to increase its production by up to 600 per cent.
"We have been friendly competitors for years," Crew said. "This is something that we both expected to come to fruition at some point in the future."
HOC had revenue of about $18 million last year, and the combined companies will now do about $75 million in total, with about 150 employees.
Alan Offenberg, CEO of Compass, said, "Following our acquisition of Manitoba Harvest in July, we are pleased to make this accretive add-on acquisition, which will further drive Manitoba Harvest's already strong growth trajectory."
Fata said Compass shared the same vision both he and Crew have about hemp as "an everyday household food item that people just don't know about yet."
Both companies began operations in 1998 when Health Canada re-legalized the cultivation of industrial hemp.
The market research suggests hemp food products are only in about three per cent of Canadian households and less than one per cent of American households.
Both believe there is plenty more business for the companies to capture.
HOC has about 400 customers now who buy its range of hemp ingredients from hemp seed oil to hulled or toasted hemp seeds to protein, flour and hemp coffee.
Manitoba Harvest ships its branded products such as Hemp Hearts, bars and proteins to about 7,000 stores in Canada and the U.S.
Manitoba Harvest is currently in the midst of defending itself against an unfair labour action brought against it by some workers who were laid off after an unsuccessful union certification drive.
Fata said the layoffs occurred after the company invested about $10 million in new automation technology that meant it could decrease production from seven to five days a week and still meet customer demand.
News Moderator: Robert Celt 420 MAGAZINE ®
Full Article: Manitoba: Hemp Firms Fire Up $42-M Merger
Author: Martin Cash
Contact: Winnipeg Free Press
Photo Credit: None found
Website: Winnipeg Free Press
