US confectioner Necco up for sale

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US based confectionery firm Necco has announced that it has a hired an investment bank to help it identify a strategic partner or explore a possible sale of its business.

The New England Confectionery Company (Necco), the oldest multi-line confectionery company in the US, makes well-known brands such as Necco Wafers and also produces private label products and performs contract manufacturing for other confectionery companies.

The 163-year-old firm, based in Massachusetts, said that while it has the ability to continue operating independently, finding a partner would be "the appropriate next step"​ to take advantage of growth and distribution opportunities.

"With the right strategic partner, who can leverage distribution to a broader customer base, NECCO presents tremendous growth opportunities in light of the value embodied in its brands and the substantial operational improvements made this year,"​ said Dave Smith, chief operations officer at the confectionery maker.

The manufacturer, which is owned by Maryland equity firm American Capital Ltd, said that it has retained the investment banking firm Sawaya Segalas & Co.

While confident it can attract a strategic partner on the right terms, Necco said it was also prepared to continue as a stand-alone company and that upcoming busy production periods would not be affected.

The company employs about 400 people at its Revere manufacturing plant, with worker representatives, the Bakery, Confectionery, Tobacco Workers and Grain Millers Union, claiming the announcement was “really good news,’’​ according to the Boston Globe.

“The worst case scenario was, we were expecting they were going to liquidate,’’ selling off Necco’s brands and real estate and leaving the workers jobless,”​ said the union spokesperson.

He added the search for a strategic partner offers more hope for the future, and that the union is in contact with investors who might be interested in a Necco stake.

Related topics: Manufacturers

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