L Catterton Said to Mull Sale or IPO for Candy Maker Ferraraby and
Rothschild, Morgan Stanley said hired to explore options
Company could be valued at $1 billion if it went public
Private equity firm L Catterton is working with advisers to find out who has the bigger sweet tooth for Ferrara Candy Co.: An acquirer or equity investors.
Catterton hired Rothschild & Co. and Morgan Stanley to explore options for Ferrara, the maker of sour gummy worms and Super Bubble, people with knowledge of the matter said.
The Oakbrook Terrace, Illinois-based candy maker could be valued at about $1 billion if it were to go public, said the people, who asked not to be identified because the information is private. It would have an enterprise value including debt of about $2 billion, the people said.
Private equity-backed companies often undertake what’s known as a dual-track process, in which the owners consider both a sale and an initial public offering, to gauge the best way to exit an investment.
The sale option can be more attractive amid equity market volatility, which can pressure offering prices and valuations, allowing owners to lock in a price for their stake.
This month, Bain Capital-backed Blue Coat Systems Inc. agreed to be acquired by Symantec Corp. for about $4.65 billion in cash instead of going public. The company, which filed its initial prospectus on June 2, had been planning to list its shares this summer in an IPO that would have valued the company at about $3.5 billion, according to people familiar with the situation.
InVentiv Group Holdings Inc., the health-care company backed by Thomas H. Lee Partners that filed for an IPO in April, is now also pursuing an outright sale, people with knowledge of the matter said this week.
Ferrara traces its roots to 1908, when Salvatore Ferrara sold candy-coated almonds from his bakery in Chicago’s Little Italy neighborhood, according to the company’s website. In 2012, L Catterton combined Ferrara Pan Candy Co. with Farley’s & Sathers Candy Co., according to a statement at the time.
The combined company distributes brands including RedHots, Now & Later, Super Bubble and Trolli, which is known for its Sour Brite Crawlers gummy worms.
Spokesmen for L Catterton, Morgan Stanley and Rothschild declined to comment. Representatives for Ferrara didn’t respond to an e-mailed request for comment.