Private equity firm L Catterton has decided to not sell Ferrara Candy Co after running an auction for the maker of candy such as Fruit Stripe gum and Now & Later chews, people familiar with the situation said this week.
L Catterton had put Ferrara up for sale about six months ago after receiving inquiries from other companies and private equity firms. Canadian buyout firm Onex Corp (ONEX.TO) had come close to buying Ferrara, Reuters reported last month, but the two parties could not agree on a price.
L Catterton was hoping a deal would value Ferrara at more than $1.3 billion, including debt, according to the sources.
Oakbrook Terrace, Illinois-based Ferrara had also filed for an initial public offering (IPO) under the Jobs Act, which allows companies with less than $1 billion in revenue to file confidentially with the U.S. Securities and Exchange Commission. Still, it has no immediate plans to go public, the sources said.
The sources requested anonymity because the information is confidential. L Catterton and Ferrara declined to comment.
Ferrara's origins date back to 1908 when Salvatore Ferrara started selling Italian pastries and sugar-coated candy almonds. It was sold to private equity firm L Catterton in 2012, after the founder's son, Nello Ferrara, died.
Under L Catterton's ownership, Ferrara merged with another of the buyout firm's portfolio companies, Farley's & Sathers Candy company. Farley's & Sathers had been an acquirer of many candy brands from larger candy companies, including sugar-coated jelly brand Chuckles from Hershey Co (HSY.N).
L Catterton also brought in new executive teams and focused on innovation, including new flavors and packaging designs. Cinnamon-flavored Red Hots, for example, now come in flavors such as Kick’n Mango Lime and Dark Chocolate Red Hots.
Over the past four years, sales of Ferrara's branded candy have grown more than 6 percent, and its major brands, such as Now & Later, have grown almost 12 percent. Since 2013, its earnings before interest, tax, and depreciation (EBITDA) have grown roughly 30 percent.
(Reporting by Lauren Hirsch in New York; Editing by Carmel Crimmins, Lisa Von Ahn and Lisa Shumaker)