The Campbell Soup Company has recently made a deal to purchase Sovos Brands at a rate of $23 per share in cash. This acquisition translates to an overall enterprise value of around $2.7 billion.
Among the brands under Sovos Brands’ umbrella are Rao’s, Michael Angelo’s, and Noosa. Their product range encompasses items like pasta sauces, dry pasta, soups, frozen entrées, frozen pizza, and yogurts.
The purchase will introduce a collection of “high-growth, market-leading premium brands” to Campbell’s division focused on meals and beverages.
Campbell’s president and CEO, Mark Clouse, said, “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”.
He added, “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 and beverages division and paired with our faster-growing and differentiated snacks division, makes Campbell one of the most dependable, growth-oriented names in food.”
Todd Lachman, Founder, President and Chief Executive Officer of Sovos Brands, commented: “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. 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.”
Campbell intends to fund the acquisition cost by issuing new debt. The completion of the deal is contingent upon the approval of Sovos Brands’ shareholders and standard closing prerequisites, including regulatory endorsements. The anticipated closing date is projected to be at the conclusion of December 2023.