ZURICH, Switzerland -- Barry Callebaut AG, a major global manufacturer of cocoa and chocolate products, send it intends to sell its U.S. consumer confectionery business, Brach's Confections Inc., to Farley's & Sathers Candy Co. Inc.
The sale will include all of the business and all assets of Brach's and its affiliates, including three factories in Chattanooga, Tenn.; Winona, Minn.; and Vernell, Mexico. The two parties expect the transaction to close at the latest by end of November 2007. The parties agreed not to disclose any financial details [image-nocss] of the transaction.
Dallas-based Brach's produces nearly 200 varieties of confections, including hard candies and chocolates, including StarBrites Mints, Milk Maid Caramels, Maple Nut Goodies and Double Dippers.
Brach's has annual gross sales of about $270 million, with sugar candy accounting for around 75% and chocolate products making up around 25%. In Zurich, Switzerland-based Barry Callebaut's annual report for fiscal year 2006/07, which closed on Aug. 31, 2007, Brach's will be classified as discontinued business. The group's figures for fiscal year 2005/06 will be restated accordingly.
Round Lake, Minn.-based Farley's & Sathers manufactures and distributes confections and snacks to all classes of trade in the United States. It has developed its business both through internal growth and through the acquisition of confectionery brands, including the Heide business from Hershey and the Trolli business from Wrigley.
Patrick De Maeseneire, CEO of Barry Callebaut, said:We acquired Brach's because we wanted to get access to the large U.S. retailers and manufacture private-label chocolate for the U.S. market; however, the market for private-label products in the U.S. has not developed in the same way as in Europe; therefore, we decided we should concentrate on other priorities like outsourcing and geographical expansion.
Dennis Nemeth, president of Farley's & Sathers, said, Brach's is a well-established brand and its products are highly regarded. This addition clearly marks our continued commitment to the candy business, and gives us additional brands with long traditions of quality that perfectly fit our long-term strategy. In addition to broadening our current portfolio of brands, this acquisition will allow opportunities to increase manufacturing capacity."
A portfolio company of private-equity firm Catterton Partners, Farley's & Sathers makes and distributes a variety of confectionery and gum brands including Farley's, Sathers, Heide, Jujyfruits, Now & Later, Intense Fruit Chews, Super Bubble, Rain-Blo, Fruit Stripe, Hot Dog! and Chuckles.
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