Hershey Sells Some Gums to Farley & Sathers

CHICAGO (Reuters) - 8/29/2003 - Hershey Foods Corp. (NYSE - HSY) said on Friday it agreed to sell three small gum brands to privately held Farley & Sathers Candy Co., as it focuses on faster-growing gums like its intense-flavored Ice Breakers line.

Hershey, the largest U.S. chocolate maker, said it agreed to sell its Fruit Stripe chewing gum, Rain-Blo gum balls and Super Bubble bubble gum brands to Farley, a confectionery maker owned by private equity firm Catterton Partners.

Terms were not disclosed.

The brands "have been profitable over the years, but certainly in relation to our other gum brands, they're not market leaders, they're not strategic," said Hershey spokeswoman Christine Dugan.

Hershey added the Rain-Blo and Super Bubble brands in 1996 with its acquisition of Leaf and added Fruit Stripe in 2000 when it picked up the gum and mint businesses from Nabisco Holdings Corp.

Farley, based in Round Lake, Minnesota, makes Heide gummi bears, Jujyfruits and Red Hot Dollars, among other candies.

Representatives for Greenwich, Connecticut-based Catterton were not available to comment.

Hershey shares edged down 30 cents to $69.97 in late trading on the New York Stock Exchange.

Hershey to sell gum brands to Farley & Sathers

HERSHEY — August 30, 2003 — Hershey Foods Corp. agreed to sell a group of gum brands to Farley & Sathers Candy Co. for an undisclosed amount.

The sale involves Fruit Stripe chewing gum, Rain-Blo gum balls and Super Bubble gum.

Hershey bought Fruit Stripe in 2000 as part of a $135 million acquisition of several Nabisco gum brands, while Rain-Blo and Super Bubble were part of the Leaf brands purchased in 1996.

In July, when it announced second-quarter earnings, Hershey said it planned to sell and eliminate some brands as part of a reorganization plan.

The brands’ new owner, Farley & Sathers, is based in Round Lake, Minn., and makes such products as Farley’s and Sathers candies, Heide gummy bears, Jujyfruits, Red Hot Dollars and Chuckles jelly beans.

Farley & Sathers is owned by private equity firm Catterton Partners, who also invests in Build-a-Bear Workshop stores, Case Logic compact disc storage products and P. F. Chang’s China Bistro Inc. restaurant chain.

Hershey, the nation’s largest chocolate maker, also makes Twizzlers licorice and peanut butter. The company had 2002 revenue of more than $4 billion.

Shares of Hershey fell 37 cents, or 0.5 percent, to close at $69.90 Friday on the New York Stock Exchange.