On May 1, Pearson Candy Co., a regional candy manufacturer headquartered in St. Paul, bought one of Nestle’s smaller brands, Bit-O-Honey. The company plans to manufacture Bit-O-Honey at its existing plant in St. Paul along with regional favorites like the Salted Nut Roll.
When people think of acquisition, they often think of highly publicized megadeals that end up on the front page of the Wall Street Journal our New York Times. In fact, many acquisitions fly under the radar.
This deal illustrates what I call the “blocking and tackling” or the everyday acquisitions. It’s a win-win transaction that serves both companies’ strategic vision. With other large brands taking up more of Nestle’s resources, Bit-O-Honey was an orphan in a big company. At Pearson Candy, Bit-O-Honey will get the attention and resources necessary to revitalize an iconic old brand.
In a heavily saturated market, brand names are more important than ever. In March, Metropoulous and Apollo partners bought the Twinkies brand from a bankrupt Hostess in order to cash in on the brand’s popularity.
It’s likely that Pearson Candy sees a similar advantage. Acquiring Bit-O-Honey allows the buyer to leverage its core competency as a candy manufacturer while tapping into a new national network. By pairing regional favorites with the nationally recognized Bit-O-Honey, Pearson Candy can introduce its products to stores across the nation.
Bit-O-Honey may be only the beginning for Pearson’s acquisitions. Backed by private equity group Brynwood Partners, Pearson Candy has both the resources and the appetite to make strategic acquisitions. In fact, the company is currently considering a second acquisition.
