Campbell’s to Buy Sovos Brands
The Campbell Soup company announced this morning its intention to purchase Sovos Brands, the owner of Rao’s, Michael Angelo’s and Noosa Yogurt.
- At a purchase price of $23 per share in cash, the deal values Sovos at approximately $2.7 billion, a 14.6 adjusted EBITDA multiple, including expected annual run rate synergies of approximately $50 million
- For calendar year 2022, Sovos reported annual adjusted net sales of $837 million, with a compounded annual organic net sales growth rate of 28% from fiscal 2019 to fiscal 2022.
- Of its three brands, Rao’s is the dominant contributor to revenue, representing roughly 69% of Sovos’ adjusted net sales for fiscal year 2022. The sauce, pasta, soup and frozen meal brand grew organic net sales by 34.9% as compared to the prior year.
Founded in 2017 by investment group Advent International, Sovos acquired the Michael Angelo’s and Rao’s brands in January and June 2017, respectively. It went on to acquire yogurt brand Noosa in 2018 and baking brand Birch Benders in 2020, undergoing an IPO in 2021. The company sold off Birch Benders in 2022, at the time stating it planned to narrow its focus around meals and sauces.
For Campbell, the deal allows it to grow the multinational to grow its Meals and Beverages division, a press release noted, particularly within frozen entrees and pasta sauces.
“This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well,” Campbell’s President and CEO Mark Clouse said in the release. “The Sovos Brands portfolio strengthens and diversifies our Meals & Beverages division and paired with our faster-growing and differentiated Snacks division, makes Campbell one of the most dependable, growth-oriented names in food.”
The transaction is expected to close by the end of December 2023, subject to Sovos stockholder approval and regulatory approvals. Both boards of directors have approved the deal.
This is a developing story.
