US —Campbell Soup, one of the largest processed food companies in the United States, has finalized the purchase of Sovos Brands at US$23 per share through an all-cash transaction valued at around US$2.7 billion.
Based in Louisville, Colorado, Sovos Brands is an American corporation that sells convenience food brands, including Rao’s Homemade items, Michael Angelo’s frozen entrees, and Noosa’s Yoghurt.
The acquisition was initially announced in August 2022, but it encountered a delay in October 2023 due to additional information requested by the US Federal Trade Commission – this pushed the expected completion into mid-2024.
According to Mark Clouse, the company’s president and CEO, the acquisition being officially complete marks a significant milestone in Campbell’s corporate journey.
This adds to Sovos Brands’ diverse portfolio, which includes pasta sauces, dry pasta, soups, frozen entrées, frozen pizza, and yogurts under the brand names Rao’s, Michael Angelo’s, and Noosa.
In 2023, Sovos reported net sales of US$1 billion, with an impressive organic net sales increase of 25% year-over-year. Rao’s, one of its key brands, experienced a notable 37% increase in organic net sales, generating US$775 million in annual revenue.
As part of the acquisition, a new business unit named Distinctive Brands will be established within Campbell’s Meals & Beverages portfolio. This unit will bring together Campbell’s Pacific Foods business, acquired in 2017, with Rao’s, Michael Angelo’s, and Noosa.
The Distinctive Brands unit will be overseen by Risa Cretella, who will report to Mick Beekhuizen, Campbell’s executive VP and president of Meals & Beverages.
Campbell anticipates a swift and efficient integration process, leveraging its familiarity with the categories and its capabilities, scale, and supply chain to drive operating synergies and enhance efficiency. The company expects annualized cost synergies of approximately US$50 million over the next two years.
The impact of the acquisition on Campbell’s fiscal 2024 guidance will be discussed when the company reports its Q3 earnings in June.
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