Still scratching your head about Hadley just selling off inventory and
walking away from several million invested in Brushy Mountain Bee Farm?
It may be that Hadley thought they had a buyer, but found out that they were
just the stalking horse for Mann Lake's new owners to figure out a fair
price for Kelley Beekeeping (formerly the Walter T Kelley Company).
To recap, Steve and Sandy Forrest cashed in at the top of the market,
selling their company (Brushy) to Hadley in 2014, showing them a record of
impressive growth and expansion of both manufacturing and distribution
without mentioning that the beekeeping fad had started to fade. But Hadley
promptly also bought Ruhl Bee Supply, hoping to have a "west coast outlet"
for Brushy-made products, not seeing the peak of the fad had already passed
in the sales data.
Also in 2014, Kelley was purchased by Miller Manufacturing, who makes and
sells the "Little Giant" line of products to farm stores and rural co-ops,
one assumes showing them similar impressive-looking, but fatal numbers. One
can almost hear the scissors snipping off the Q4 2013 results from the data
set in both cases to avoid showing buyers the deeper than usual "winter
slump" in sales.
Both Miller and Hadley got "had" - the market for beekeeping supplies
continued to contract, making the expansion investments look like poor
decisions that would never break even.
Then, Jack Thomas passed away this fall, and his wife sold Mann Lake to Grey
Mountain Partners, who has now also bought Kelley, the only largish
stand-alone manufacturer and catalog house left.
What happens after what comes next? Is Grey Mountain Partners making the
same error that Hadley did, but with multiple years of data to warn them off
from expanding? Why buy Kelley, if the market is contracting, doesn't that
make their value even less than Brushy's? What of Brushy's very very
beekeeping-oriented capital assets, converted from gear formerly used to
make Lane Cedar Chests?
Stay tuned kids, and keep your money out of companies that make sawdust, and
in something more stable and safe, like cryptocurrencies and Greek
government-issue bonds! :)
And remember, the bees just don't even notice what kind of box they live in.
https://www.businesswire.com/news/home/20181114005707/en/Mann-Lake-Completes
-Management-Buyout-Support-Grey
https://tinyurl.com/yc8ovzm8
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