Campbell Soup Co. to Acquire Sovos Brands Inc.

Campbell Soup Co. (CPB) announced on Monday its agreement to acquire Sovos Brands Inc., the parent company of popular food brands Rao’s, Michael Angelo’s, and noosa. The deal, valued at approximately $2.7 billion, will further expand Campbell’s product portfolio.

A Lucrative Deal

Campbell will purchase each Sovos share for $32 in cash, which is a significant premium to Sovos’ closing stock price of $18.02 on Friday. The acquisition is projected to enhance adjusted per-share earnings by the second year and is expected to be finalized by the end of December.

Fueling Growth

To finance the deal, Campbell Soup will issue new debt. Sovos, known for its high-quality food products, reported annual sales of $837 million in 2022. A remarkable feat was its compounded annual organic net sales growth of 28% from fiscal 2019 to fiscal 2022.

Embracing Success

Campbell’s CEO Mark Clouse expressed enthusiasm about the acquisition. He stated, “We’re thrilled to incorporate the most captivating growth story in the food industry and welcome the talented employees who have played a pivotal role in building a nearly $1 billion portfolio. This acquisition aligns perfectly with our strategy of focusing on one geography, two divisions, and select key categories that we excel in.”

Market Response

In response to the news, trading in Sovos’ stock was temporarily halted while Campbell Soup’s stock experienced a slight premarket decline of 0.3%.

Campbell Soup Co’s acquisition of Sovos Brands Inc. serves as a significant milestone in expanding its presence within the food industry. With a solid growth strategy and a commitment to excellence, Campbell continues to position itself as a leader in delivering quality food products to consumers.