On Monday, Campbell Soup Company (CPB) and Sovos Brand Inc. announced that the companies have reached a cash deal and the famous chicken noodle soup company would acquire the popular sauce company. Sovos Brands shares rose by 25 percent to $22.6 after the announcement of the press release while the soup king saw a dip in its share price after announcing the saucy deal. Campbell Soup shares declined by 2 percent to $44.43.
Campbell will acquire Sovos Brands at $23 per share. The total enterprise value would be roughly $2.7 billion. Campbell’s Meals and Beverage Division will add products from the premium brands under Sovos to diversify as well as increase its growth.
According to a joint press release, Sovos Brands is a successful North American company that has seen a growth rate of 28 percent from fiscal year 2019 to 2022. It offers high quality products such as pasta sauces and dry pasta soups as well as frozen products such as entrées, pizzas and yogurts under different brand names: flagship Rao’s as well as Michael Angelo’s and noosa.
Campbell President and CEO Mark Clouse said that the Sovos Portfolio would “strengthen” as well as “diversify” their “Meals and Brands division” together with their “faster growing and differentiated Snacks division.”
Todd Lachman, Founder, President and Chief Executive Officer of Sovos Brands described the company’s plan to join Campbell Soup Company as a “momentous occasion.”
The CEO also described the brands under Sovos as “premium brands anchored by Rao’s brand” and said that the transaction would boost their shareholder’s price and they would get a “92 percent increase from” their “2021 IPO price.”
Lachman also expressed confidence in the brand reaching more households as Campbell Soup is a well-established brand, and also mentioned that the transaction would further build on their existing track record of growth in future.
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