Campbell Soup has completed the acquisition of Sovos Brands at $23 per share through an all-cash deal.
The deal, announced in August 2022, represents a total enterprise value of approximately $2.7 billion.
In October 2023, the deal faced delays in its completion owing to a request for further information from the US Federal Trade Commission. Initially slated for closure in Q4 2023, the delay was anticipated to extend into mid-2024.
Continue Exploring: Campbell Soup Company to acquire Sovos Brands, expanding premium portfolio with $2.7 Billion deal
This week, the completed purchase has been announced, described by Campbell’s president and CEO, Mark Clouse, as an “important milestone” in the company’s history.
The Sovos Brands portfolio encompasses a range of food items, such as pasta sauces, dry pasta, soups, frozen entrées, frozen pizza, and yogurts, marketed under the brand names Rao’s, Michael Angelo’s, and Noosa.
Sovos recently reported $1 billion in net sales for the full year of 2023, with an organic net sales increase of 25% year-over-year. Within this performance, Rao’s organic net sales increased 37%, generating $775 million in annual revenue.
A new sector will emerge within Campbell’s Meals & Beverages division, christened Distinctive Brands. This unit will amalgamate Campbell’s Pacific Foods, acquired by the company in 2017, with Rao’s, Michael Angelo’s, and Noosa. The remaining trio of business units within the Meals & Beverages segment comprises US Retail, Canada, and Foodservice.
Distinctive Brands will operate with specialized teams backed by Campbell’s extensive resources. Risa Cretella, who previously held the position of chief sales officer at Sovos, will lead the unit as senior VP and general manager. She will report directly to Mick Beekhuizen, the executive VP and president of Campbell’s Meals & Beverages division.
Continue Exploring: Shareholders green-light Campbell’s £2.7 Billion acquisition of Sovos Brands
Campbell anticipates a swift and efficient integration, leveraging its deep understanding of the categories along with its capabilities, scale, and supply chain. This integration is poised to yield operational synergies and enhance overall efficiency.
The acquisition is anticipated to enhance adjusted diluted earnings per share within the second year of ownership, excluding one-time integration costs and expenses to achieve synergies. The company forecasts annualized cost synergies to total approximately $50 million over the next two years.
Campbell will address the influence of the acquisition on its fiscal 2024 guidance during the company’s Q3 earnings report in June.
