Sovos Brands to be acquired by Campbell Soup
For almost $2.7 billion, The Campbell Soup Co. is purchasing Louisville, Colorado-based Sovos Brands, Inc. Producing sauces, yogurts, and frozen prepared foods under the Michael Angelo’s, Rao’s, and Noosa brands, is Sovos Brands.
Mark Clouse, president and chief executive officer of Campbell Soup, stated, “This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions, and select key categories that we know well.” “Over the last five years, we have been able to deliver good results, improve our brands and skills, and generate solid cash flow to reduce debt thanks to our focused strategy. With all of this development, I am sure that we will be prepared to carry out and incorporate this significant acquisition.
The approval of Sovos Brands stockholders and normal closing conditions, such as regulatory approvals, are required before the transaction may close. By the end of December, the closing is anticipated. According to Campbell Soup, both firms’ boards of directors have accepted the acquisition.
Sovos Brands produced $878.4 million in revenue during the 2022 fiscal year. Rao’s is the biggest brand in the company, with revenues projected to reach $580.1 million in 2022. Sovos Brands has expanded Rao’s into other categories over the last few years, including frozen dinners, frozen pizza, pasta, and soups.
In comparison to the first half of fiscal 2022, when the firm reported a loss of $26.2 million, Sovos Brands earned net profits of $13.2 million for the first half of fiscal 2023, which concluded on July 1. This amounts to 13¢ per share on the common stock.
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Sales in the first half increased somewhat to $470.4 a million from $407.4 million in the previous year.
Todd Lachman, president and CEO of Sovos Brands, stated, “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.” “The incredibly talented and driven team at Sovos Brands has been instrumental in helping us build one of the fastest growing food companies of scale in the industry today. Without them, our success would not have been possible.”
It is anticipated that this deal will provide significant value for our investors, increasing our price by 92% over our 2021 IPO. I have faith that Campbell, one of the most reputable and trustworthy food companies in North America, will be able to expand the number of homes that carry our products and maintain our successful growth trajectory for years to come.