The Riverside Company has agreed to sell Tate’s Bake Shop to publicly traded Mondelēz International for approximately $500 million. Riverside acquired Tate’s Bake Shop in September 2014.
Tate’s products – which include cookies, cakes, brownies, and pies – are sold through grocery and specialty food stores, through its web store, and at its retail location and headquarters in Southampton, NY. The company, led by CEO Maura Mottolese, was founded in 1980 (www.tatesbakeshop.com).
According to Mondelēz, Tate’s has been one of the fastest growing biscuit brands in the United States over the last 12 months. “Tate’s is a great strategic fit that will complement our portfolio of beloved snacks brands,” said Dirk Van de Put, Mondelēz Chairman and Chief Executive Officer. “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. Tate’s has demonstrated exceptional and very profitable growth, and we look forward to working with the Tate‘s management team to expand distribution and build upon that success.”
Mondelēz will operate Tate’s as a separate standalone business and the company’s senior leadership will continue to run the business from its headquarters on Long Island, including its Bake Shop located in Southampton.
“Riverside took a great company and made it even better,” said Riverside Managing Partner Loren Schlachet. “Our retail partners had a knack for telling Tate’s exactly what they wanted, and our distributor partners ensured that those needs were met. That’s the essence of great consumer brand investing and it helped make Tate’s a success story.”
During Riverside’s term of ownership, Tate’s expanded and improved production processes, expanded distribution, developed new products, and grew its sales and marketing team. Tate’s revenues and earnings have increased by 4x over the last five years.
“Tate’s had a great foundation for becoming the truly special company it is,” said Riverside Partner Alan Peyrat. “With new products like snack-sized Tiny Tate’s and on-trend flavors like Coconut Crisps and Ginger Zinger, we helped the company respond to marketplace demands. Coupled with a focus on profitability, we kept building on the proven success of existing product lines, making customers and consumers even happier along the way. Working with the Tate’s team was a wonderful experience.”
Working with Mr. Schlachet and Mr. Peyrat on the transaction for Riverside were Operating Partner Tim Spring, Senior Associate Kenneth Johnson, and Finance Director Gary Schlegel.
The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $400 million. Since its founding in 1988, Riverside has invested in more than 520 transactions and its portfolio includes more than 75 companies. The firm is headquartered in New York with 16 additional US and international offices (www.riversidecompany.com).
Mondelēz International (NASDAQ: MDLZ) is a multinational confectionery, food, and beverage company. It consists of the global snack and food brands of the former Kraft Foods after the October 2012 spin-off of its North American grocery operations. The company has more than $30 billion in annual revenues and has more than 107,000 employees. Mondelēz International is headquartered in the Chicago suburb of Deerfield (www.mondelezinternational.com).
Houlihan Lokey and TM Capital are the financial advisors to The Riverside Company on this transaction. Closing is expected before the end of August 2018.
© 2018 Private Equity Professional | May 7, 2018
