Campbell Soup Company (NYSE: CPB) has finalized the purchase of Sovos Brands, Inc. for $23 per share, marking a significant expansion of its premium brand offerings. The all-cash deal values Sovos Brands at roughly $2.7 billion.
Mark Clouse, President and CEO of Campbell Soup, highlighted the acquisition as a pivotal moment that enhances the company’s Meals & Beverages division and complements its Snacks division. The addition of Sovos Brands, known for its upscale products like Rao’s pasta sauces and noosa yogurts, is expected to drive Campbell’s growth strategy forward.
Sovos Brands reported a robust $1 billion in net sales for the year ending December 30, 2023, with Rao’s alone contributing $775 million. The acquisition introduces the Distinctive Brands business unit, combining Sovos Brands with Pacific Foods to spur further growth.
Risa Cretella, formerly Chief Sales Officer at Sovos, will lead the new unit under the guidance of Mick Beekhuizen, Campbell’s EVP and President of Meals & Beverages. The company anticipates a smooth integration, projecting $50 million in cost synergies over two years and a positive impact on earnings by the second year.
The company expects a fast and effective integration given Campbell’s familiarity with the categories and its strong capabilities, processes and proven integration playbook.
The transaction is expected to be accretive to adjusted diluted earnings per share by the second year of ownership, excluding one-time integration expenses and costs to achieve synergies.
Campbell’s supply chain excellence and scale are expected to drive operating synergies, while improving scale efficiency of Campbell’s core operations. The company expects annualized cost synergies to reach approximately $50 million over the next two years.
Campbell Soup will discuss the impact of the acquisition to its fiscal 2024 guidance when the company reports third-quarter earnings in June.
Headquartered in Camden, N.J. since 1869, Campbell generated fiscal 2023 net sales of $9.4 billion. Our portfolio includes iconic brands such as Campbell’s, Cape Cod, Goldfish, Kettle Brand, Lance, Late July, Milano, Michael Angelo’s, noosa, Pace, Pacific Foods, Pepperidge Farm, Prego, Rao’s, Snyder’s of Hanover, Swanson and V8. Campbell has a heritage of giving back and acting as a good steward of the environment. The company is a member of the Standard & Poor’s 500 as well as the FTSE4Good and Bloomberg Gender-Equality Indices.
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