The group says it will pay £58m for the total assets of the Monkhill Confectionery company in an attempt to step up its production capacity and capitalize on a portfolio of some fondly remembered brands.
Monkhill also produces the Jameson's chocolate confectionery range and other branded boiled sweets, gums and jellies.
The acquisition, expected to be completed by February, would also give Tangerine control of Monkhill's three factories in York, Cleckheaton and Pontefract, and its distribution centre in Derbyshire at Holmewood.
Tangerine chairman Steven Joseph said that beyond the benefits to the company's production and distribution cycle, it was the strength of the brands in the Monkhill portfolio that had led to the purchase.
"To acquire brands and products of such heritage is a mouth-watering prospect," he stated "There is no doubt that this major acquisition will significantly enhance Tangerine, creating a business with a turnover of £150 million and 1,500 employees."
The deal will be Tangerine's second major acquisition in the space of two years, after purchasing private label sweet maker Burton's Confectionery in August 2006.
The Company says that the combined strength of these buys will allow it to offer UK consumers a comprehensive range of sugar confectionery products.
"We very much welcome the skills, innovation and commitment that the staff and employees of Monkhill will undoubtedly bring to the enlarged company and we look forward to working with everyone connected with the business," he stated.
While not a globally renowned brand like some of Cadbury's major labels, sweets like the sherbet fountain - a pen shaped tube of sherbet with a liquorice stick - have almost a cult following amongst sweet-toothed Brits pining for a taste of yesterday.
This trend within the confectionery market has not been lost on players in the UK market.
In August last year, Cadbury itself re-launched its Wispa brand of chocolate bar following online petitioning through social networking sites like Myspace and Facebook, to tap into a "nostalgia" trend for confectionery.
The growing market for this nostalgia candy and sweets has seen increasing specialist interest in recent years, with online retailers such as UK-based Keep It Sweet setting up shop to meet growing demand.
A spokesperson for the group, which aims to bridge the market for consumers for sweets long thought forgotten on the market, said that in the year since they began operations, demand for products ranging from Acid Drops and Chocolate Limes had exceeded their expectations.
They added that kids of all ages, particularly in the not-so-traditional 35 to 75 age bracket were increasingly on a nostalgia kick for the good old days.
For Cadbury though, the sale will bring an end to an ongoing disposal scheme for brands that it believes show limited potential for growth or margin improvement.
Since 2005, the company ahs moved to sell of brands like the Slush Puppy ice-based drinks in the US, and an Australian jam and jelly maker.