Campbell Soup to acquire Sovos Brands in $2.3 billion deal

Summary:

• Campbell Soup to acquire Sovos Brands for $2.3 billion in cash.
• The deal will help Campbell diversify its meals and beverages division with brands like RAYOS and Sovos.
• Sovos has shown impressive growth with over 20% increase in sales in the past three years.
• The acquisition allows Sovos to enhance its growth prospects.
• Todd Lachman announces the momentous occasion for Sovos brands to join Campbell's family.

Big news from Campbell Soup today. The package foods company announcing it will buy Sovos brands for 2.3 billion dollars. The maker of RAYOS, pasta sauce, and Nusa yogurt being acquired for $23 per share in cash. Campbell's saying the deal will help it diversify its meals and beverages division thanks to brands like RAYOS and Sovos. Other offerings that shares up 25% not quite to the deal price but still getting in that direction.

Multidimensional value creation, attractive sustainable profit growth, and accelerating their Campbell's focus strategic plan

Part of that, it also kind of leans into their delivering Campbell's $1 billion sauces strategic objective. I would love to just be the head of the sauces strategic objective over at Campbell's. That sounds amazing and a great title to put on a business card but filling in some white space that they are looking across in a growing ultra distinctive Italian sauce category where Campbell's does not currently operate which is what made this more attractive. Well, and also if you look at Campbell's overall it's a pretty slow growth company right. If you look over the past few years since 2020 it's had single-digit growth. It almost 10% growth is what it's looking at in sales this year.

Sovos' Impressive Growth

Sovos, by contrast, has had 20% plus growth in sales each of the past three years. Remember it's a relatively recent public offering too. I think it came public in 2021. Its growth is expected to slow a little bit but still if Sovos is looking to soup up its growth. Oh, you went there? Yeah. Get a little saucier when it comes to its growth. This is one way that it is looking to do that.

Todd Lachman's Announcement

Yeah, they said that today marks the momentous occasion for Sovos brands as they announced their plan to join the Campbell's family that coming from Todd Lachman who is the founder president and chief executive officer. Friend of the show as well. We've spoken to him many times. Yeah all right so fun to see this tie-up between a friend of the show and a good Camden New Jersey based company or as Pennsylvania people call it East Philadelphia.