Campbell Soup to Acquire Rao's Pasta Sauce Parent Company

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