Sugar-free chocolate company Lily’s Sweets is reportedly selling its business with a deal likely to close within months, according to sources familiar with the matter.
The sources, who declined to be identified due to privacy, told me the VMG Partners-backed company generated $110 million in sales, which could put its value at more than $400 million based on multiples of recent transactions in the space.
Potential acquirers include confectionery and snacking market leaders: Mars & Wrigley, Hershey
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Other suitors include Lindt & Sprüngli, which has seen its North American market share expand last year partially driven by Russell Stover’s sugar-free products. A spokesperson of the Swiss chocolatier has declined to comment on rumors about Lily’s Sweets, but said it is “constantly evaluating interesting possibilities”.
Lily’s Sweets was created by Cynthia Tice a decade ago to use stevia as a main sweetener to satisfy health-conscious consumers’ chocolate cravings, and is currently led by industry veteran Jane Miller. The business has expanded beyond its initial chocolate bars into baking chips, peanut butter cups, chocolate covered nuts, and popcorn over the years.
The Colorado-based chocolate maker, which remains silent on its potential sale, has reportedly posted a 55% revenue increase year-over-year, outperforming many classic brands in retailers, including Target
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The high-growth of Lily’s Sweets reflects the growing market appetite for reduced-sugar chocolate and overall sugar-free confections in the U.S., which are expected to grow 3.3% and 14.6% annually in sales, reaching $241.4 million and $735.4 million in 2021, respectively, Euromonitor data showed.