On October 24, 2018, KNPC Holdco, LLC (“Kar’s Nuts”), a leading manufacturer of nut and trail mix snacks sold under the Kar’s® and Second Nature® brands, announced the completion of its merger with Morley Candy Makers, LLC (“Sanders”), a maker of premium confectionary products sold under the Sanders Fine Chocolatiers® brand.
The merger brings together two iconic brands with deep roots in the Detroit area, said company officials in a statement. Kar’s Nuts was founded in Detroit in 1933 by Sue Kar, who roasted peanuts in her home to sell outside nearby Navin Field, which later became Tiger Stadium. Similarly, Sanders was founded in 1875 when Fred Sanders Schmidt opened his first Sanders candy shop in Detroit.
Sanders CEO Brian Jefferson said, “As we explored strategic opportunities for Sanders®, it was critical to identify a partner who truly understood and valued our brand and our employees. We are extremely excited about this merger as we feel confident that it will preserve cherished Sanders products, (and) bring a new level of creativity to our offerings that is sure to delight customers, and continue to take care of our employees.”
The snack industry merger will provide Sanders with expanded national distribution opportunities and offer Kar’s Nuts additional production and product capabilities. Sanders will operate as its own division within the combined company, and the workforces of both companies will remain in place, according to a company statement.
Kar’s® and Second Nature® have become two of the best-selling trail mix brands in the country, including the #1 selling Kar’s Sweet ‘n Salty Mix. The products are available across the United States. Sanders has grown into a nationally recognized producer of premium confections, artisanal chocolates, baked goods, dessert toppings and ice cream. Its products are currently sold in leading retailers nationally.
Kar’s Nuts’ acquisition of Sanders represents its first acquisition following the investment in Kar’s Nuts in March 2017 by an affiliate of Palladium Equity Partners, LLC, a middle market private equity firm with approximately $2.7 billion in assets under management. Palladium and other Kar’s Nuts equity holders made follow-on investments to support the acquisition and the future growth of the combined company.
“Sanders is a successful company with a legacy of customer loyalty and quality products. As we consistently evaluate growth opportunities, this merger is ideal for Kar’s Nuts as we expand our reach in the snacking industry,” commented Kar’s Nuts President Nick Nicolay. “We look forward to the Sanders family joining the Kar’s Nuts family and continuing to offer products that consumers across the country appreciate and enjoy.”
Nicolay will serve as CEO of the combined company which will be headquartered in Madison Heights, Michigan. Brian Jefferson will remain in place through the transition with plans to retire once the two companies are fully integrated.
KPMG Corporate Finance LLC served as financial advisor to Sanders on the transaction. Giarmarco, Mullins & Horton, P.C. served as Sanders’ legal advisor. Jaffe Raitt Heuer & Weiss, P.C. served as legal advisor to Kar’s Nuts.