Campbell Soup Company is adding some distinguished brands to its portfolio. It was recently announced that the company will acquire Sovos Brands for $23 per share in cash, representing a total enterprise value of approximately $2.7 billion.
“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,” said Campbell’s President and Chief Executive Officer Mark Clouse. “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.”
According to a press release, this acquisition represents a 14.6x adjusted EBITDA multiple, including expected annual run rate synergies of approximately $50 million.
Sovos Brands had annual adjusted net sales of $837 million in calendar year 2022, offering a variety of premium products under the brand names Rao’s, Michael Angelo’s, and noosa. The flagship Rao’s brand grew organic net sales by 34.9 percent compared to the prior year.
“Today marks a momentous occasion for Sovos Brands as we announce our plans to join the Campbell’s family,” commented Todd Lachman, Founder, President, and CEO of Sovos Brands. “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. 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 percent increase from our 2021 IPO price.”
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