St. Paul's Pearson Candy Co. is coming back under local ownership.
The 109-year-old company, best known for its Salted Nut Roll and Nut Goodie candy bars, will be sold to Minneapolis-based Spell Capital. The company has been owned by Connecticut private-equity firm Brynwood Partners since 2011.
"Not only is it great to have a local investment firm acquiring a local manufacturing company, but Spell has a lot of background in manufacturing," said Michael Keller, the CEO of Pearson.
Pearson's has about 145 hourly production workers and 40 office employees at its W. 7th Street plant in St. Paul, the 60-year home of the company and its only location. The company's management and employees will stay in place.
"Anybody that grew up in Minnesota knows the Pearson brands, and they're as strong as ever," said Jim Rikkers, a senior managing director at Spell Capital. "It's a perfect fit for us. It's in the metro area. It's a manufacturing business."
The deal closed Friday. Terms were not disclosed.
Pearson's core market is Minnesota, the Dakotas, Wisconsin and Iowa, though it also has strong sales in Utah and Colorado.
While Nut Goodie is a regional candy bar, Pearson's Salted Nut Roll and its chocolate-covered Mint Patties compete nationally with Hershey's Payday bar and York mints.
Other Pearson brands include the Bun Bar, sold mostly in Ohio and neighboring states, and Bit-O-Honey, an Illinois-based brand the company bought in 2013.
P. Edward Pearson and four brothers started the company in Minneapolis. With the Nut Goodie, invented in 1913, and the Salted Nut Roll, created in 1933, Pearson grew to be one of the nation's top 20 candy manufacturers.
When P. Edward died in 1933, his son George quit college and became a partner with his uncles. In 1951, George bought the Trudeau Candy Co. in St. Paul, which made mints and the Seven Up bar.
George became president of the company in 1959 but sold it in 1969 to International Telephone and Telegraph's Continental Baking Co., and the firm changed hands again and fell on hard times, before Larry Hassler took over part ownership in 1985 and revived the company. He ultimately sold the company to Brynwood Partners, which owns many candy brands.
Keller, who became CEO in 2011, said the plant needs updating and the new owners are prepared for that.
"Investment is needed in the plant," Keller said. "It makes a lot of sense for a new owner to make that investment at the beginning of its ownership cycle and Spell, given their experience with manufacturing companies, they get that."
Spell Capital's portfolio includes a handful of Minnesota companies, but the firm owns companies all over the country.
"We're going to look to invest in the plant itself and continue to modernize the facility and reap efficiencies," Rikkers said. "We think there's a good opportunity for that."