Ferrero to purchase Fannie May Confections Brands for $115 million
Deal with 1-800-Flowers set to close May 30.
March 16, 2017
Italian group Ferrero International has announced a multimillion-dollar deal to purchase Fannie May Confections Brands, Inc., from 1-800-Flowers.com, Inc., a leading floral and gourmet gift provider.
In a deal set to close May 30, Ferrero will pay $115 million cash — adjusted for seasonal working capital — for Fannie May’s assets, including the Fannie May and Harry London brands, Fannie May’s e-commerce business, 79 retail stores located in and around Chicago, a manufacturing facility in North Canton, Ohio, and two temperature-controlled warehouse and distribution facilities in Chicago and Maple Heights, Ohio.
The transaction is subject to customary closing costs and regulatory approvals.
Ferrero will also enter a partnership with 1-800-Flowers that allows the company to sell Fannie May and Ferrero products under the Nutella, Ferrero Rocher and Raffaello brands in its e-commerce channels, as well as in gift baskets and towers sold through U.S. club, food, drug and mass channels.
“We are very excited to be working with Ferrero International, one of the world’s largest and most respected confectionery companies,” says Chris McCann, ceo of 1-800-Flowers.com. “This transaction will further strengthen our balance sheet while concurrently reducing the working capital requirements in our business model.
“Importantly, the strategic commercial agreement with Ferrero will enable us to continue offering the iconic Fannie May and Harry London chocolate brands across our ecommerce and wholesale channels and expand our product offerings to include some of Ferrero’s world-renowned chocolate confectionery brands.”
Dave Taiclet, president of 1-800-Flowers' Gourmet Food Group, said in a phone interview Wednesday that Ferrero and Fannie May had been discussing a commercial relationship when Ferrero offered to buy the brands and their associated assets. Talks began at the end of 2016 and continued into 2017.
"Strategically, it made sense for (Ferrero) because of their desire to grow aggressively in the United States and North America," he says. "It made sense for us because of the financial part of the business.”
Giovanni Ferrero, ceo of Ferrero Group, described the acquisition as an “extraordinarily good fit.”
“Since our entry into the U.S. in 1969, we have actively expanded our premium product offering organically and are thrilled to further accelerate growth through the addition of Fannie May,” he says. “We look forward to adding Fannie May’s outstanding team and valuable manufacturing, distribution and retail platform to Ferrero’s expanding U.S. presence and to supporting and growing this iconic American brand for years to come.”
Carle Place, N.Y.-based 1-800-Flowers purchased Fannie May from Alpine Confections for approximately $85 million in 2006, two years after Alpine Confections acquired the company for $38.9 million.