CAMDEN, NJ. — The Campbell Soup Co. is acquiring Sovos Brands, Inc., Louisville, Colo., for approximately $2.7 billion. Sovos Brands is a manufacturer of sauces, yogurts and frozen prepared foods marketed under such brands as Rao’s, noosa and Michael Angelo’s.
“This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well,” said Mark Clouse, president and chief executive officer of Campbell Soup. “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 closing of the transaction is subject to Sovos Brands stockholder approval and customary closing conditions, including regulatory approvals. Closing is expected by the end of December. The transaction has been approved by the boards of directors of both companies, according to Campbell Soup.
In fiscal 2022, Sovos Brands generated $878.4 million in sales. The Rao’s brand is the company’s largest, with $580.1 million in sales in 2022. During the past few years Sovos Brands had extended Rao’s into such additional categories as frozen entrees, frozen pizza, pasta and soups.
During the first half of fiscal 2023, ended July 1, Sovos Brands recorded net income of $13.2 million, equal to 13¢ per share on the common stock, and an improvement over the first half of fiscal 2022 when the company recorded a loss of $26.2 million.
First half sales ticked up to $470.4 million from $407.4 million the year before.
“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,” said Todd Lachman, president and CEO of Sovos Brands. “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.”
