Tate’s Bake Shop, a Long Island company that traces its roots to the early 1970s when founder Kathleen King first sold her homemade cookies at her father’s North Sea farm, has agreed to be acquired for about $500 million by snack food giant Mondelez International Inc.
Tate’s — known for its signature thin, chocolate chip cookies — bakes more than 1.5 million cookies at its East Moriches manufacturing facility each day. Deerfield, Illinois-based Mondelez, which owns many confectionary brands formerly owned by Kraft Foods Inc., had about $26 billion in net revenue last year.
The sale is “going to enable us to really leverage Mondelez’ expertise,” said Maura Mottolese, who joined Tate's in 2014 as chief executive. “We have a very small international footprint. This will open up the doors for our brand internationally. It will help expand our capabilities and product lines.”
The company's products — available in 85 percent of supermarkets throughout the United States — are all produced on Long Island. Mottolese said the aqcuisition could result in the expansion of manufactuing capacity locally, or include the opening of additional production facilites elsewhere, though the company will operate as a standalone business unit and remain locally based.
“We will continue to be based on Long Island and will continue to be true to our Long Island roots,” Mottolese said.
The CEO declined to provide specific revenue figures for privately-held Tate's, but said the company has more than quadrupled in size over the last five years.
"Tate's is a great strategic fit that will complement our portfolio of beloved snacks brands," Dirk Van de Put, chairman and chief executive of Mondelez said in a company news release. "With a unique and authentic brand and truly delicious products, this acquisition gives us an attractive entry point into the fast growing premium cookie segment."
In January, Tate’s announced plans to expand its warehouse and distribution operations in Westhampton Beach. Mottolese said at the time that the company had about 320 employees. Today it has about 360 employees, with the overwhelming majority of those working in production. The company operates out of several facilities on the East End, and operates a retail bake shop in Southampton.
The company's baked goods — packaged with its green and white label — are distributed across the country. In 2014, private equity firm Riverside Co. purchased a majority stake in the company with plans for a major expansion of staff and products.
The "half-a-billion" proposed sale represents "an enormous exit” for investors, said Mark Lesko, vice president of economic development at Hofstra University. “You just don’t see $500 million exits every day, certainly not on Long Island.”
It shows that "regardless of the industry, whether it’s biotech or chocolate chip cookies, if you have developed an amazing product and company, the capital will find you,” said Lesko, who has worked extensively with startups and investors on the Island. "It can be done in a way that results in a huge exit. A company doesn’t have to be high tech.”
The sale is expected to close this summer.
CORRECTION: An earlier version of this story listed the number of cookies Tate's produces each day incorrectly.