RHCP announces the acquisition of the Allan Candy Company (www.allancandy.com) from Cadbury Adams Canada. RHCP announced today that it has purchased the Allan Candy Business from Cadbury Adams Canada in a transaction that will return Allan Candy to its former status as one of Canada’s top independent candy producers. Established in the 1950s, the Allan Candy business today has approximately $100 million in sales and a strong portfolio of product offerings in bulk candy, count goods, retail bags, and seasonal offerings for Easter and Christmas. Allan Candy also has a large contract manufacturing division which manufactures confectionary products for some of the world’s top global confectionary producers. A reputation for top manufacturing quality and product innovation over more than 50 years of operation has left Allan Candy with strong relationships with North America’s leading confectionary distributors and retailers. “With Allan now operating as an independent company once again, we believe that significant benefits will be created for customers through faster and nimbler processes, more aggressive product and process innovation, and better overall speed to market”, said Andrew Cockwell, Principal of ReichmannHauer Capital Partners.

RHCP sought out the Allan Candy opportunity because it resonated with several of RHCP’s value creation themes. First, RHCP believed that Allan Candy was a significantly underleveraged brand. The business holds a large number of underleveraged product brands, including for example many Easter and Christmas novelty offerings well known to Canadians. Second, the investment provides access to cross border arbitrage on certain raw materials due to Allan’s position within Canada. Third, the business offers multiple opportunities for operational improvement and transformation, including implementation of quality and lean cost redesign initiatives. Finally, Allan Candy was a non core division of Cadbury and accordingly in RHCP’s view represented a real performance improvement opportunity through providing the business with the better focus and management attention associated with a stand alone business. Extracting Allan Candy out of Cadbury was also a complex corporate carve-out, which played to RHCP’s transactional skill set and comfort with complexity and detail.

Going forward, the Allan Candy business will significantly increase its product innovation efforts; reenter its products in to the US marketplace, continue to improve the efficiency and effectiveness of its manufacturing operations, and expand its contract manufacturing capabilities and relationships to serve other large global confectionary producers interested in a high quality, high efficiency “near shore” manufacturing location. Prashant Pathak, Managing Director of RHCP said, “We are very excited about what the Allan Candy Business can achieve over the next several years when its entire team is 100% focused on driving this independent business again. Allan Candy now has all of the building blocks it needs to succeed”.

June 2007  |  more news