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The manufacturer of Kar's Nuts said Wednesday that it had acquired the makers of Sanders chocolate, bringing together two brands with deep Metro Detroit roots.

The combination of Madison Heights' KNPC Holdings LLC and Detroit's Morley Candy Makers LLC prepares the company to be a leading platform within the snacking industry. Nick Nicolay, CEO of the merged company, said the combined revenue for the year is expected to be $185 million.

"Sanders is a well-run company with some good-quality products," said Nicolay, Kar's Nuts president, "that was profitable and that could give us some diversification out of our traditional nut and trail mix line. We see ourselves in the healthier space. They're more in the indulgent space."

Nicolay declined to provide details on the deal, but said the acquisition will provide the Sanders division with expanded national distribution opportunities and offer Kar's Nuts additional production and product innovation capabilities.

He said while Sanders may not have an item right now to replace the chocolate pieces in Kar's No. 1-selling Sweet 'n Salty trail mix, the company hopes to explore opportunities to sell co-branded items in the future.

Palladium Equity Partners LLC, a private equity firm with approximately $2.7 billion in assets, bought Kar's Nuts in March 2017, providing the investment to diversify the company. Nicolay said Kar's has looked at a number of options and first met with Sanders early in the summer.

The combined company will be headquartered in Madison Heights. Sanders CEO Brian Jefferson said he will remain in place over the next six months through the transition phase. Nicolay said the new company expects to retain all other current employees.

Sanders actually is hiring for about 20 positions right now, Jefferson said.

"Combining makes us and more formidable in the marketplace for the continuation and growth of the brand and the growth of Kar's," Jefferson said. "This was done to nurture and grow the brand. It's always been a goal for Sanders to become America’s confectioner. We have additional resources to do that now."

Nicolay said the company also plans to keep open the Sanders candy stores located in Metro Detroit, in Mackinaw City and on Mackinac Island. Fred Sanders Schmidt opened his first Sanders candy shop in Detroit in 1875, and it has grown to sell chocolates, baked goods, dessert toppings and ice cream in national retailers.

"We think (the shops provide) good visibility," Nicolay said. "And we'll look to see if it makes sense to put our own product in those stores."

In 1933, Sue Kar began selling home-roasted peanuts outside Tiger Stadium in Detroit. Since then, her company's brands, Kar's and Second Nature, have become two of the best-selling trail mix brands in the country.

"We have 230 years in combined history right here in Detroit," Nicolay said. "I think that's pretty cool."

bnoble@detroitnews.com

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