Business

Necco candy equipment is to be sold off, sounding another death knell of a Boston institution

Sky Bar is to be auctioned this week, along with Peach Blossoms, Haviland Thin Mints, and Mighty Malt Milk Balls.
Jonathan Wiggs/Globe Staff/File
Sky Bar is to be auctioned this week, along with Peach Blossoms, Haviland Thin Mints, and Mighty Malt Milk Balls.

It took decades for the owners of the New England Confectionery Co. to assemble their candy empire. And it will take just a matter of weeks for that empire to be broken into pieces and sold off.

Much of the equipment in the Necco plant, which shuttered suddenly in July, will be sold at an online auction on Wednesday and Thursday. Four candy brands are also available: Mighty Malt Milk Balls, Haviland Thin Mints, Sky Bar, and Peach Blossoms.

“We’re calling this the biggest candy auction of the 21st century,” said Jim Greenberg, co-president of Union Confectionery Machinery. “Nothing is even close. This is the big one.”

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More than 250 possible bidders are registered to participate, according to Greenberg, whose New York firm is handling the auction with Rabin Worldwide of San Francisco.

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Many of the other Necco brands were already sold off after the Revere company exited bankruptcy in May. Those brands’ new owners are already plotting their own revivals: the Clark Bar was acquired by Boyer Candy; Sweethearts and Necco wafers ended up with the Spangler Candy Co.; and Slap Stix lollipops and Banana Split chews also have a new home, as yet to be identified.

Necco was an institution, with more than 150 years of history in the business, dating back to Chase and Company’s lozenges in the late 1840s. That Boston-area company combined with two others to form Necco in 1901. The candy maker’s sudden and swift closure, following a bankruptcy auction after a decade under private equity ownership, came as a shock to many in the business.

“It has definitely shaken up the industry,” said Joe Melville, co-owner of Melville Candy in Randolph. “It’s tough to compete on a world stage.”

There is so much equipment for sale that auctioneers scheduled the auction over two days. Everything from peanut roasters to chocolate-coating machines is up for grabs. A walk-through at the Revere site had been scheduled for earlier this week, but that was canceled after ammonia leaked from the factory’s cooling system. (Greenberg says none of the equipment was damaged.)

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The beginning of the end for Necco, according to a lawsuit that the bankruptcy trustee filed against its former owners, came in 2007, when a private equity firm, ACAS, acquired the candy maker. ACAS, which has since been acquired by Ares Capital, proceeded to split Necco in two parts — the main candy-making business being one, the 50-acre property and factory building, the other. The property was sold last year for $54.5 million to Atlantic Management of Framingham and VMD Cos. of North Andover.

By that point, the candy business had been losing at least $10 million a year and could not make its lease payments to the new landlord, according to the trustee’s suit. Ares moved to sell the candy company to a liquidator earlier this year.

A Food and Drug Administration warning in May complicated matters, citing rampant unsanitary conditions and evidence of rodents throughout the 830,000-square-foot plant.

Spangler, an Ohio company that makes Dum Dums lollipops and Circus Peanuts, emerged as the winning bidder in the bankruptcy auction one week after the FDA letter became public, offering hope that some of the manufacturing would remain in Revere. But after then trying to reduce its bid, Spangler quickly backed out, and the runner-up, Round Hill Investments, moved to the front of the line.

That company, too, got cold feet, soon after closing on the deal for $17.3 million in May. The firm’s principals had helped revive the Hostess lineup of snacks, but not so the Necco sweets: They sold the business to a candy manufacturer who has yet to be named, and announced in July that the Revere plant would close immediately.

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Industry experts have offered a range of potential causes for Necco’s demise. Selling off the valuable property, which turned out to be too large for Necco’s needs in the first place. Not enough digital-age marketing to woo a new generation to its old school candies. High labor and real estate costs in the Boston area. High sugar costs in the United States that put domestic candy companies at a disadvantage to overseas competitors.

“Anytime we do an auction like this, it’s terribly bittersweet,” said Greenberg, whose company supplied Necco with equipment for years. “We don’t build relationships with our customers in the hopes that one day, they’re going to go out of business.”

Spangler said it still needs to solve some manufacturing challenges related to the Sweethearts and Necco wafers; that production will move to Spangler’s home state of Ohio. The company is planning to relaunch the wafers next year, and the candy hearts in time for Valentine’s Day in 2020. Executives at Spangler didn’t return several calls from the Globe seeking comment.

Anthony Forgione Jr., president of Pennsylvania-based Boyer, said he wanted to own the Clark Bar even before the Necco bankruptcy; Boyer is best known for its Mallo Cups, and Forgione said he wanted a traditional candy bar in its lineup.

Clark’s origins can be traced to Pittsburgh, about two hours away from Boyer’s factory in Altoona, Pa. That was another motivating factor, he said.

“In the ’50s and ’60s, these two brands were like fighting siblings, neck and neck in sales” in western Pennsylvania, Forgione said. “We’re thrilled to be keeping it here. Candy used to be regional. You used to be able to tell where somebody grew up by what their favorite candy was.”

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.