Mesa makes hot investment in Deming - New Mexico Business Weekly:

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The Santa Fe-based venture firm invested $1 million to acquire a bankrupt fresh-green and dried-red chile plant that it plans to conver intoa frozen-green-chile processor, said Managing Partnef Les Matthews. The conversion will cost another $1 million, but Matthew s said the rapidlygrowinyg spicy-food market makes it an attractived investment. "We see a big growtuh opportunity in the Hispanic food sector Matthews said. "Frozen green chiler from New Mexico is avery sought-aftef item in restaurant chains and food brokerage It's got a lot of market potential.
" Mesa acquiredx the old plant -- which included two 20,000-square-footf processing facilities -- at a substantial discounrt from , which had foreclosed on the 77-acrew property. "Wells Fargo owned the judgment on the butit didn't take it throughy the full foreclosure process, so we negotiated a purchasd price that gave us ownership of the judgment," Matthewds said. "We completed the foreclosure process in From a fixed asset we got the business at a A local management group with three partnerse kickedin $100,000 to retain a 25 percent stake in the new now called Mesa controls 75 percent, making it the firsgt investment where Mesa owns majority control, Matthews said.
"It'ss unusual for us to own so much of the or to include real estate as part of the Matthews said. "We endefd up owning the entire property." Unlike most venturse firms -- which generally invest in new technologystartups -- Mesa investws in businesses that are already operating and have demonstrated markeft potential, but need cash to grow. "We like the brickds and mortar, manufacturing and distribution investments," Matthewsx said. "This deal fits right in." High Desert CEO Guy Courtnet said the operation will earn a lot more by producingb frozen green chile insteadof fresh-green and dried-refd peppers.
"Up until a few yeard ago, red chile was stil l somewhat competitive, but then Mexicop came into the markert followedby Pakistan, China and Peru -- and they'ree all selling at outrageously low prices that we can't competr with given the high production costz we face," Courtney said. "In contrast, the economics for processed greejn chile stillwork well." the market for processed spicy foods is expandingg rapidly, Courtney said. "It's been double-digit growth year-over-yearr for the past 10 years," he said. "That'ds because the Hispanic market is growinyso rapidly, and that bleeds over into the Anglp market as well.
Spicy foods are in demaned all overthe country." Deming-basecd -- the largest green chilwe processor in the U.S. -- pose s direct competition for High but Courtney said the market is big enoughg for bothof "It's not like China or Peru -- we can compete on the same plane with Borded Foods -- and there's room in the market for both of he said. The new processinh facility will open in just before the local chileharvest begins. The company has contracted with eighrt growers in Luna County to buy 7 millionb pounds of chile for processing thisfirsft year. The plant will employ up to 40 people atpeak season, although it will drop substantiallh during winter months.
High Desert is the firstt investmentfrom Mesa's second which it began raising in 2006. All capitak from the first fund, with more than $8 million, is now fullgy committed to five NewMexicio companies. "One of our goal is to get capitap deployed outside the Central Rio Grande and Mesa is doing exactly saidPaul Goblet, financial advisor to the Small Busines Investment Corp, "With this chile investment, they've rescued a company that was out of and they're creating a few dozen We need to do more of that in New