A longtime Minnesota candy maker has returned to local ownership, and has plans to invest in its St. Paul factory.
Pearson Candy Co. — maker of Salted Nut Rolls, Nut Goodies, Mint Patties and Bit-O-Honey, among other products — is now owned by Minneapolis private equity firm Spell Capital Partners.
The deal was finalized on Friday; for the past seven years Pearson had been owned by Connecticut-based Brynwood Partners.
Pearson has been making candy for 109 years. Michael Keller, Pearson's president and CEO, said the company will benefit from having local owners who know its decades-long history in Minnesota.
"Yes, this is a business. And yes, we are a candy manufacturer and try to be a very competitive one," he said. "But I think Pearson's means a little bit more than that to the community, to St. Paul, to Minnesota, even the Upper Midwest. And it's kind of exciting about the opportunity to have a local owner who doesn't have to think that through; it's just instinctual that they kind of understand what Pearson's is all about."
Spell Capital Partners, founded in 1988, owns a number of industrial manufacturing businesses.
"Spell Capital and the significant number of Minnesota-based investors who we represent are excited to have the opportunity to own and invest in an historic Minnesota company like Pearson's," Bill Spell, president of Spell Capital, said in a news release. "At Spell, we have a passion for and an extensive interest in manufacturing-based business, and we see meaningful opportunities for improvement and growth at Pearson's."
Keller said Pearson's current facility on West Seventh Street in St. Paul dates back to 1959, and some of its equipment is even older.
"We definitely have some opportunities to make some capital improvements in the plant. So we'll be looking at opportunities to upgrade or improve or to even replace certain equipment," Keller said. "And then the facility itself has been there a very long time. Built one way in 1959, that may or may not be the best way to run the plant in 2018, 2019. So we might be looking at some opportunities for the facility as well."
Pearson has about 180 employees. The employees and management team will remain in place, the companies said in a news release.
Keller said Brynwood, a private equity firm, was nearing the end of its investment horizon for Pearson, and was looking to sell to a new owner that would be better-suited to invest in the plant for a longer period of time. Pearson acquired the Bit-O-Honey brand under Brynwood's ownership, adding to its portfolio of long-established candy products.
Even with that acquistion, Salted Nut Rolls remain Pearson's flagship product, Keller said.
"It's the mighty Salted Nut Roll that kind of rules the day," he said. "It's really the brand that most people who know Pearson's well, associate with Pearson's."
Pearson's Bit-O-Honey and Mint Patties have nationwide distribution, Keller said, while the other products are more regional.
Keller said Pearson continues to hold its own in the competitive candy industry, against much-larger competitors. He attributes that to customers' long-standing loyalty.
"Even after 109 years, we can still remain competitive as long as we stay true to who we are and continue to turn out high-quality confections that people really like," he said.