So what’s new in the Candy Making Industry and Strategic Acquisitions? On May 1, 2013, Pearson Candy Company bought Nestlé’s Bit–O–Honey. Pearson plans on producing the 90- year old confectionary brand at its St. Paul factory. Pearson CEO Michael Keller said, “We plan to bring renewed focus to the Bit-O-Honey brand by increasing its availability to consumers and by offering customers new and innovative Bit-O-Honey products.” The terms of the agreement were not announced or released.
Keller told Twin Cities Business that because the Bit-O-Honey deal just closed, “plans are vague at best.” He said, the brand was an attractive deal because it’s nationally recognized and Pearson will be able to focus on growing the brand in a way that Nestle was unable to do. Pearson’s sees “a lot of opportunities in packaging and sizes” and it has plans to make the Bit-O-Honey products more widely available.
Bit-O-Honey is a candy with almond bits embedded in a honey flavored taffy and it was first made in Chicago in 1924. The brand was bought by Nestlé in 1984.
Pearson Candy also makes Pearson’s Bun, Pearson’s Nut Goodies, Pearson’s Mint Patties, and Pearson’s Salted Nut Roll.
Brynwood Partners VI, LP is the Connecticut-based private equity firm that bought Pearson Candy in 2011. Brynwood confirmed it has acquired 37 brands from 14 different companies over its 29 year history. Five Nestlé brands were included in those acquisitions.
While most people think of acquisitions as highly publicized megadeals, this acquisition is typical of an everyday deal. It appears to be a win-win transaction that will serve both companies’ strategic visions. When you look at the number of large brands under Nestlé’s ownership, it seems that not a lot of resources were used towards promoting Bit-O-Honey. Bit-O-Honey will now get the necessary attention and resources needed to revitalize the brand with Pearson Candy.
Due to a heavily saturated market, brand names are more important than ever. In March, the Twinkies brand was acquired by Metropoulous and Apollo partners. This was a strategic move to cash in on the brand’s popularity.
Likewise, Pearson Candy sees a similar advantage. Pearson is leveraging its core competency as a candy manufacturer while tapping into a new national market through the acquisition of Bit-O-Honey. With Brynwood partners backing Pearson Candy, the candy maker has both the resources and the appetite to continue making strategic acquisitions. In fact, Pearson is currently considering a second acquisition.
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