CHICAGO - Candy maker Tootsie Roll Industries Inc. has announced an agreement to buy Canadian-based Concord Confections. The sale price was reported to be $197 million plus another $20 million to discharge Concord's debt. It will be paid in cash via short-term bank financing.
The deal, according to industry sources, is expected to be finalized early this month. Included in the sale will be the majority of Concord's assets along with its three manufacturing facilities, located in Barcelona, Spain; Ontario, Canada; and Selma, AL.
Concord was founded in 1986 by Bruce Weiner, Serge Nusbaum and Howard Smuschkowitz as a re-packager of ball gum. It has since grown to become a leading manufacturer and supplier of ball gum and other confections to the bulk vending industry. The company is best known for its "Dubble Bubble" line of gum, which it acquired from Fleer Confections in 1998. The well-recognized brand is said to be the world's first bubble gum with a history that dates back to 1928 and inventor Walter Diemer.
Tootsie Rolls' current president and COO, Ellen Gordon, the wife of chairman and CEO Melvin Gordon, was named to the position in 1978 , at which time she was only the second woman to be elected president of a company listed on the New York Stock Exchange.
"We thought that the 'Dubble Bubble' brand was a good brand and similar to what we do in the sense that we make a lot of children's candy," Gordon told VT. "We think it's wonderful that Concord Confections has decided to join Tootsie Roll and it's a great fit of children's candy and we look forward to the association."
According to confirmed reports, principals of Concord, including National Bulk Vendors Association vice-president Howard Smuschkowitz, will leave the firm, though the majority of senior management and employees will remain in place.
In 2002, Concord acquired a portion of American Candy Co., which had filed for Chapter 11 protection the previous year. In 2003, Concord acquired the Philadelphia Chewing Gum Co., maker of a variety of bubble-gum brands including "Swell," "El Bubble" cigars, "Cry Baby" and "Joe Blo."
Concord is also known for such innovative products as "Tear Jerkers," "Tongue Splashers," and "Blox." A dominant presence in the bulk vending industry, the privately held Concord has reported global distribution in 60 countries and "every continent with the exception of Antarctica."
Tootsie Roll Industries traces its roots back more than a century to 1896 and its invention by Austrian immigrant Leo Hirschfield, who dubbed his new sweet after his daughter's nickname. An American icon, "Tootsie Rolls" were said to be the first penny candy to be individually wrapped in paper. A publicly traded company for more than a century, the Chicago-based firm is one of the nation's largest candy companies with operations in Massachusetts, New York, Tennessee and Wisconsin, as well as Mexico. Among the firm's better-known products are such confectionary standards as "Andes Candies," "Junior Mints" and "Dots." The company is also said to be the largest manufacturer of lollipops in the world, producing its flagship "Tootsie Roll Pop."
Tootsie Rolls' annual sales approached $400 million, according to the firm's quarterly report, and second quarter 2004 sales reportedly total some $77.16 million.