Four companies have stepped forward to buy the New England Confectionery Co. (Necco), according to The Boston Globe. The maker of Necco Wafers, Clark Bar, Sweethearts and Mighty Malts, plus its factory and grounds in Revere, Massachusetts, will be sold in a May 23 bankruptcy auction in Boston.
The current high bidder, at $15 million, is Round Hill Investments, whose chairman is C. Dean Metropoulos. He is perhaps best known for rescuing Hostess Brands from bankruptcy in 2013.
"They're all interested in what we call the 'sugar line,' the ones that produce the Wafers and the Sweethearts," Harry Murphy, Necco's court-appointed bankruptcy trustee, told The Boston Globe. "We're very pleased there's been this much interest in the company."
The four entities probably have different reasons for wanting to purchase Necco, reportedly the oldest multi-line candy manufacturer in the U.S. It's likely that Round Hill and Spangler want to keep producing the company's most successful candy brands — Necco Wafers and Sweethearts. It's uncertain if products like Clark Bar, Mary Jane and Haviland Thin Mints will be produced by the new owner, sold off, or production discontinued altogether.
Chances are Kgbdeals Shopping Inc. and Gordon Brothers want to use the 810,000-square-foot plant and 55 acres for other purposes beside making candy. The property was rezoned last year and has the potential to host high-tech industries, so they may see more profit in that direction.
Harry Murphy, the bankruptcy trustee, told The Boston Globe all four bidders were willing to keep the company going into the fall at the current site.
Things looked bleak for Necco in March when CEO Michael McGee informed state and local officials that if no buyer emerged by May, the facility would have to close and lay off its employees. The news took fans of Necco Wafers by surprise and panic set in. Sales jumped 50% and consumers went on social media channels to rescue the brand with a #savenecco hashtag.
While the company's chocolate products, such as Clark Bar and Sky Bar, don't seem to evoke the same passion as the wafers, the response showed potential buyers that fans have a nostalgic fondness for the company and weren't keen on saying goodbye.
Wednesday's auction will open with the highest bid on the table, which is Round Hill's. Given that its chairman, C. Dean Metropoulos, is known for reinvigorating brands, it's possible it will emerge with the company, institute efficiencies, reduce debt and potentially combine it with another company or sell it. Besides Hostess, Metropoulos has also revived Pabst Blue Ribbon, Bumble Bee Tuna and Chef Boyardee.
In a Forbes interview last year, Metropoulos explained why his company was interested in saving Hostess, and it's possible he has a similar view of Necco: "We loved the brand. We thought the brand was still very relevant. Consumers had a lot of loyalty to it. And we provided the vehicle to effectively restructure it and to move forward with it."
It appears that Necco will survive, but whether all its brands do is an open question. The candy market continues to thrive, and even as people vow to eat healthier, they still want to indulge. But the candy market as a whole is competitive, and it may be that Necco has enough of an appeal to keep it going even if sales return to normal after the fear of the company going away subsides.