Campbell Soup, a well-known US company famous for its canned soups and made famous by the works of Andy Warhol, has signed an agreement to acquire Sovos Brands, a food company specializing in Italian products. The purchase price will be $23 per share in cash, for a total transaction value of approximately $2,7 billion. This represents a multiple of 14,6x Adjusted EBITDA, including expected annualized run rate synergies of approximately $50 million.
The transaction, considered "strategic" adds a portfolio of premium brands High-growth market leader in the Meals & Beverages division of Campbell's portfolio, explains the note company.
The Sovos brand
Founded in 2016, Sovos Brands has focused on the creation and distribution of a variety of premium food products, including pasta sauces, dry pasta, soups, frozen ready meals, frozen pizza and yogurt. The company is known for its distinctive brands, including Rao's, Michael Angelo's and noosa.
In 2022, Sovos Brands registered a fnet attracted of $837 million and had compound annual growth in organic net sales of 28% from 2019 through 2022.
The flagship brand Rao's, which accounted for approximately 69% of Sovos Brands' adjusted net sales in fiscal 2022, reported organic net sales growth of 34.9% year-over-year.
“We are thrilled to add the food industry's most compelling growth story and welcome the talented employees who have built a portfolio of nearly $1 billion. This acquisition fits perfectly and accelerates our strategy of focusing on a select geography, two divisions and key categories that we know well. Our focused strategy has enabled us to deliver solid results over the past five years, enhance our brands and capabilities, and generate strong cash flow to reduce 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 Food and Beverage business and, combined with our fastest growing and most diverse Snacks business, makes Campbell one of the most trusted and growth-focused names in the food industry,” said Mark Clouse, President and CEO of Campbell.
“Today scores a historic moment for Sovos Brands as we announce our plans to join the Campbell family,” he commented Todd Lachman, Founder, President and CEO of Sovos Brands, Inc. “We have built a unique, high-growth food company focused on taste-driven products through a portfolio of premium brands, with the Rao's brand as an anchor. Our success would not have been possible without the incredibly talented and passionate team at Sovos Brands, who have been instrumental in building one of the fastest growing food companies in the industry. This transaction is expected to create substantial value for our shareholders, an increase of 92% over the 2021 IPO price. As one of the most trusted and respected food companies in North America, I am confident in Campbell's ability to continue to bring our products to more homes and to further build on our track record of growth and success for years to come.”
