Campbell Soup has agreed to acquire Sovos Brands, the parent company of food brands including Rao’s pasta sauces and noosa yogurt, in a deal valued at about $2.7 billion.
The companies said Monday that Campbell would buy Sovos for $23 a share.
Campbell said the acquisition adds a market-leading portfolio of brands to its meals and beverages division. The Rao’s line of sauces, Sovos’s flagship brand, saw organic sales grow by more than a third in fiscal 2022.
Campbell has targeted growing its pasta-sauce business, which includes the pantry mainstay Prego, to $1 billion in annual sales. Chief Executive Mark Clouse said the acquisition “over-delivers” on that goal and that the premium-priced Rao’s is a complement to the more affordable Prego.
“The fact is we see this as completely complementary,” Clouse said Monday on a call with analysts. “The two businesses really do not interact or compete. It’s a different consumer, different occasion.”
Sovos CEO Todd Lachman said the transaction represents a 92% increase from the company’s 2021 initial public offering price.
Source: Wall Street Journal