Ferrara Candy Company, acquired by the private equity firm L Catterton in 2012 to create the third-largest non-chocolate confectionary company in the country, will be sold to the Alba, Italy-based Ferrero Group, makers of Nutella, Tic Tacs and Fannie May candies, the companies announced in a joint press release on Oct. 18.
Terms of the deal were not disclosed, and the transaction is expected to be finalized by the end of 2017.
Ferrara Candy Company, the makers of iconic brands such as Lemonheads and Trolli gummy candies, was founded in 1908 and headquartered in Forest Park from 1959 until 2012.
L Catterton announced it would acquire Ferrara Pan Candy Company in June 2012, just one month after the death of longtime Ferrara CEO Nello Ferrara at the age of 93. The company merged with Minnesota-based Farley’s & Sathers, the makers of such chewy treats as Chuckles and Jujyfruits as well as Brachs Candy, which L Catterton had already been acquired. The consolidated company was renamed Ferrara Candy Company.
After that acquisition, L Catterton shut Farley & Sathers’ operations in Minnesota and consolidated operations in the Chicago area. Ferrara Candy Company moved its headquarters to Oakbrook Terrace, and in 2014 Ferrara leased a 750,000-square-foot warehouse space in Bolingbrook.
Ferrara Candy Company’s plants in Forest Park and Bellwood will remain open, according to the press release announcing the sale of Ferrara Candy Company to Ferrero, as will two plants in Mexico. Ferrero Group also plans to keep the Bolingbrook warehouse, Ferrara Candy Company’s research and development center in Bellwood and a distribution center in Texas.
“Ferrero intends to maintain and leverage this existing footprint with no further consolidation,” the press release states.
L Catterton had been looking to sell Ferrara Candy Company or spin it off as a public company for more than a year. In July 2016, Crain’s Chicago Business reported that Ferrara Candy Company “could be valued at $1 billion if it were to go public.”
The firm ended up selling the company to the European confectionary giant instead.
“This transaction represents a terrific outcome for Ferrara and L Catterton, and we are confident that Ferrara will thrive and reach new heights in collaboration with Ferrero,” said Scott Dahnke, global CEO of L Catterton in the press release.
Ferrero, founded in 1946 in Alba, Italy, is the third-largest candy company in the world with global sales of more than $12 billion. It entered the U.S. market in 1969 with Tic Tac breath mints. In May, Ferrero announced it had completed its acquisition of Fannie May, another famous U.S. candy brand once headquartered in Chicago, for $115 million.
“With this acquisition, we are continuing to increase our overall footprint and product offering in the important U.S. market, establishing a presence in new confectionary categories with attractive growth prospects, including gummy and seasonal candies,” said Giovanni Ferrero, executive chairman of the Ferrero Group in the Oct. 18 press release announcing the purchase of Ferrara Candy Company. “We look forward to continuing to grow the Ferrara business, investing in its brands to support expansion plans, leveraging its U.S. manufacturing plants and distribution centers and creating opportunities for its talented people.”
The press release specifically noted Ferrara Candy brands such as Trolli, a gummy candy brand, and Black Forest Organics, which includes organic and fruity candies. The press release also mentions Brachs, another former Chicago candy giant which had been part of Farley & Sathers before the 2012 merger with Ferrara.
Brachs is attractive for its seasonal candy, “particularly at Halloween,” the press release stated.