Report: NECCO plant shuts down after investment firm sells company to unnamed manufacturer
Round Hill Investments purchased NECCO in May.
The New England Confectionery Co. (NECCO) plant in Revere, Mass. shut its doors Tuesday after its recent buyer, Round Hill Investments, LLC, announced it has sold the company to another candy maker.
The Boston Globe reported that Round Hill, which purchased NECCO for $17.3 million in May under an entity called Sweetheart Candy Co., declined to name the new purchasing manufacturer.
“Round Hill Investments was very excited to acquire NECCO’s historic brands and to be part of their national resurgence,” the company told the Boston Globe Tuesday. “After careful engagement and consideration, however, the firm decided to sell the brands to another national confection manufacturer and today announced the closure of the operations in Revere, Mass.”
This transaction is the latest in a long line of trouble for the embattled Necco wafers maker.
In March, NECCO CEO Michael McGee announced layoffs of nearly 400 employees if the company could not find a buyer. Two months later, after filing for Chapter 11 bankruptcy, a federal judge opened the bidding process, setting the minimum bid at $13.96 million.
Spangler Candy Co., maker of Dum Dum lollipops, made the winning bid of $18.83 million during a May 23 bankruptcy auction. However, the deal fell through shortly after because NECCO could not meet closing conditions set forth under Spangler’s purchase agreement.
Round Hill Investments, which has a legacy of saving floundering food manufacturers, purchased NECCO in a sale that closed May 31.
In addition to financial trouble, NECCO had run afoul of the U.S. Food and Drug Administration, according to a warning letter the agency made public in May. The FDA said an inspection between Nov. 13, 2017 and Dec. 14, 2017, revealed violations of food safety regulations.