Workers at the New England Confectionary Company, (Necco) reacted positively to the news that the ‘for sale’ sign has been removed, with the equity group owners revealing than they will hold on to the firm for at least another year
Last November, the parent company, American Capital, announced that it had retained an investment bank with the view to exploring the sale of the sweet business, one of the oldest in the US.
However, on Monday local union officials said they were told that the equity group would to retain the Necco Wafer manufacturer for 12 to 24 months.
The Bakery, Confectionery, Tobacco Workers and Grain Millers Union told the Boston Globe that operatives were now assured there would be jobs at the plant “for the next couple of years”.
Necco executives said that the manufacturer has suspended its search for buyers and added that continuing to operate the sweet maker would represent “the optimal strategy for American Capital” to maximize the return on its investment.
“The opportunity for Necco at this juncture is quite strong; we have made critical improvements to our business, the Original Necco Wafer is being re-launched later this month due to popular demand, and we are developing a robust pipeline of new products," said Dave Smith, chief operating officer at the Massachusetts based confectioner.
The confectionery firm also said that it has worked to boost its efficiency in shipping practices, and has broadened its distribution channels.
“Management has confidence that recent improvements in the business, combined with continued support from its partners and local officials will greatly improve Necco’s growth trajectory,” added the sweet manufacturer.
David Chiaverini, senior research analyst at BMO Capital Markets, said American Capital likely did not receive bids that were high enough to justify the equity firm selling off Necco, reports the Boston Globe.
American Capital has loaned about $67m to Necco since becoming a majority owner a few years ago, Chiaverini said, and the equity firm likely would not recover its full investment if Necco were offloaded now.