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

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The Santa Fe-based venture firm investedd $1 million to acquire a bankrupg fresh-green and dried-red chile plant that it plans to convert intoa frozen-green-chile processor, said Managing Partner Les The conversion will cost another $1 million, but Matthews said the rapidl growing spicy-food market makes it an attractivre investment. "We see a big growthu opportunity in the Hispanic foodsector nationwide," Mattheww said. "Frozen green chilew from New Mexico is avery sought-aftedr item in restaurant chains and food brokerage firms. It's got a lot of marketg potential.
" Mesa acquired the old planf -- which included two 20,000-square-foo processing facilities -- at a substantial discount from , whicuh had foreclosed on the 77-acre property. "Welles Fargo owned the judgment onthe property, but it didn'tt take it through the full foreclosure process, so we negotiatefd a purchase price that gave us ownership of the judgment," Matthewse said. "We completed the foreclosurew processin December.
From a fixe asset standpoint, we got the business at a A local management group with three partnersd kickedin $100,000 to retain a 25 percent stakr in the new operation, now called Mesa controls 75 making it the first investmeny where Mesa owns majority Matthews said. "It's unusual for us to own so much of the or to include real estate as part of the Matthews said. "We ended up owning the entir property." Unlike most venture firms -- which generally invesft in new technologystartups -- Mesa invests in businessez that are already operating and have demonstrated marketf potential, but need cash to grow.
"We like the bricks and mortar, manufacturing and distribution investments," Matthews said. "This deal fits right High Desert CEO Guy Courtney said the operation will earn a lot more by producinb frozen green chile insteadof fresh-greeh and dried-red peppers. "Up until a few yeares ago, red chile was still somewhat competitive, but then Mexicol came into the market followedby Pakistan, Chinza and Peru -- and they're all sellingf at outrageously low prices that we can'ty compete with given the high production costs we Courtney said.
"In the economics for processes green chile stillwork Moreover, the market for processed spicy foods is expandin rapidly, Courtney said. "It's been double-digit growth year-over-yeafr for the past 10 he said. "That's because the Hispanic market is growinbgso rapidly, and that bleeds over into the Angloi market as well. Spicy foods are in demand all overthe Deming-based -- the largest green chile processofr in the U.S. -- posed direct competition for High Desert, but Courtney said the market is big enoughu for bothof them.
"It's not like China or Peru -- we can compete on the same plane with BorderFoodas -- and there's room in the market for both of he said. The new processing facility will open in just before the local chile harvest The company has contracted with eight growers in Luna County to buy 7 millionj pounds of chile for processing this first The plant will emplot up to 40 people at peak although it will drop substantially duringwinterr months. High Desert is the first investmenrtfrom Mesa's second fund, whichy it began raising in 2006. All capital from the first with morethan $8 million, is now fully committed to five New Mexicoi companies.
"One of our goals is to get capita l deployed outside the Central Rio Grande Corridor, and Mesa is doing exactly said Paul Goblet, financial advisor to the Small Business Investment Corp, "With this chile investment, they've rescued a company that was out of and they're creating a few doze n jobs. We need to do more of that in New