Campbell Soup Company and Sovos Brands Inc. announced that the companies have entered into an agreement for Campbell to acquire Sovos Brands Inc. for $23 per share in cash, representing a total enterprise value of approximately $2.7 billion.
The strategic transaction adds a high-growth, market-leading premium portfolio of brands to diversify and enhance Campbell’s Meals & Beverages division.
Sovos Brands had annual adjusted net sales of $837 million in calendar year 2022 with compounded annual organic net sales growth rate of 28% from fiscal 2019 to fiscal 2022. The North America food company offers premium products including pasta sauces, dry pasta, soups, frozen entrées, frozen pizza and yogurts under the brand names Rao’s, Michael Angelo’s and noosa.
The flagship Rao’s brand, which represented approximately 69% of Sovos Brands adjusted net sales in fiscal 2022, grew organic net sales by 34.9% compared to the prior year.
“We’re thrilled to add the most compelling growth story in the food industry and welcome the talented employees who have built a nearly $1 billion portfolio,” Campbell’s president and CEO Mark Clouse said in the announcement. “This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well. Our focused strategy has enabled us to deliver strong results over the last five years, enhance our brands and capabilities, and generate strong cash flow to lower debt. With all this progress, I am confident in our readiness to execute and integrate this important acquisition. The Sovos Brands portfolio strengthens and diversifies our Meals & Beverages division and paired with our faster-growing and differentiated Snacks division, makes Campbell one of the most dependable, growth-oriented names in food.”
“Today marks a momentous occasion for Sovos Brands as we announce our plans to join the Campbell’s family,” Todd Lachman, founder, president and chief executive officer of Sovos Brands Inc., added in the announcement. “We have built a one-of-a-kind, high growth food company focused on taste-led products across a portfolio of premium brands, anchored by the Rao’s brand. Our success would not have been possible without the incredibly talented and passionate team at Sovos Brands, which has been instrumental in building one of the fastest growing food companies of scale in the industry today. This transaction is expected to create substantial value for our shareholders, resulting in a 92% increase from our 2021 IPO price. As one of the most trusted and respected food companies in North America, I’m confident in Campbell’s ability to continue bringing our products to more households and further building on our track record of growth and success for years to come.”
Following the completion of the transaction, Sovos Brands’ results will be managed within Campbell’s Meals & Beverage division.
Closing is expected by the end of December 2023.
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