California confectionery company Leaf Brands is the latest firm to be linked with a bid for Nestle’s US candy business.
Reports in the US business media reveal the firm’s chief executive Ellia Kassoff is keen to get private-equity backing to make a bid for the Nestle division, which analysts suggest could cost US$3bn.
Leaf Brands is a familiar name in the US confectionery sector. The Newport Beach company can trace its origins back to the 1920s when the original Leaf Candy Company rose to be the fourth-largest candy producer in North America creating brands such as Milk Duds and Jolly Rancher. It was sold to the then Hershey Foods Corporation in 1996 but was revived in 2011.
It now owns a half-dozen legacy candy brands – including two former Nestle candies, Wacky Wafers and Tart ‘n Tinys – and has annual sales this year of about $5m.
Its flagship product is Hydrox sandwich cookies, founded in 1908 and later surpassed in popularity by Oreo.
In June, Switzerland’s Nestle announced it plans to “explore strategic options” for its US confectionery business, which houses brands including Butterfinger and Baby Ruth.
Confectionery giants Hershey and Mars have been touted as possible suitors, as has Ferrero, the Italy-based food group behind Kinder chocolate, and US confectioner Ferrera Candy Company.
On its chances of success, Leaf’s Kassoff is quoted as saying: “We’re obviously the small guy, but we’re the value-add guy.
“We know [more] about Nestle than most of the other bidders.”