Campbell Soup Company makes an offer to acquire sauce maker Sovos Brands in Colorado

Campbell Soup Company, the canned food giant based in New Jersey, United States, made an offer to acquire Sovos Brands, a sauce maker based in Louisville, Colorado, United States on August 7, 2023. The all-cash offer was made for USD $23 per share and the transaction is expected to close by the end of December 2023.

Transaction Summary

Our Take on the Acquisition

Campbell Soup Company (acquirer) aims to diversify and grow its Meals & Beverages division and sees Sovos Brands (target), particularly their Rao’s Homemade brand, as a valuable addition to its portfolio. This acquisition will feed into Campbell’s strategic goal of growing into the Italian sauce category while adding to their frozen meal portfolio to generate more than USD $1 billion in revenue per annum. In addition, Campbell expects to realize USD $50 million in cost synergies over the next two years.
The share price of Sovos Brands increased to USD $22.56 which is in line with the offer price when the offer was announced. The share price of Campbell declined nominally during the same duration. This may signal that the offer was either fairly priced or slightly overpriced.

The Facts of the Acquisition

  • Target: Sovos Brands is a publicly listed company producing consumer-packaged food brands Rao’s, Michael Angelo’s and noosa, which include pasta sauces, dry pasta, frozen meals, soups, and yogurts. It has been serving the North American region since 2017.
  • Acquirer: Started in 1869, Campbell Soup Company is a multi-billion dollar U.S. food company that produces canned foods, baked goods, snacks, and beverages under several brands, including their canned soup under its flagship brand Campbell’s. Some of their other iconic brands include Goldfish, Kettle Brand, Milano, Pace, Pepperidge Farm, Prego, Snyder’s of Hanover, Swanson, and V8.

The Transaction

Date:August 7, 2023
Price:USD $23 per share for an approximate total of USD $2.7 billion
Purpose: To expand their sauce and frozen meal portfolios
Details: All-cash transaction for all Sovos Brands shares at USD $23 per share
Acquirer’s Statement:Mark Clouse, Campbell’s president, and CEO – “We’re thrilled to add the most compelling growth story in the food industry and welcome the talented employees who have built a nearly $1 billion portfolio. This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions, and select key categories that we know well. Our focused strategy has enabled us to deliver strong results over the last five years, enhance our brands and capabilities, and generate strong cash flow to lower 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 Meals & Beverages division and, paired with our faster-growing and differentiated Snacks division, makes Campbell one of the most dependable, growth-oriented names in food.”
Target’s Statement:Todd Lachman, Founder, President and Chief Executive Officer of Sovos Brands, Inc. – “We have built a one-of-a-kind, high growth food company focused on taste-led products across a portfolio of premium brands, anchored by the Rao’s brand. Our success would not have been possible without the incredibly talented and passionate team at Sovos Brands, which has been instrumental in building one of the fastest growing food companies of scale in the industry today. This transaction is expected to create substantial value for our (Sovos Brands) shareholders, resulting in a 92% increase from our 2021 IPO price. As one of the most trusted and respected food companies in North America, I’m confident in Campbell’s ability to continue bringing our products to more households and further building on our track record of growth and success for years to come.”

Target/Seller: Sovos Brands

Company Information

Target:Sovos Brands, Inc
Industry: Food Products
Type:Publicly listed company (Nasdaq: SOVO)
Employees:690 (Source: Pitchbook)
Locations:Head Office: 168 Centennial Pkway, Suite 200, Louisville, Colorado, United States
Regional Office #1: 1901 4th Street, Suite 200, Berkeley, California, United States
Regional Office #2: 441 Bloomfield Ave, Montclair, New Jersey, United States
Regional Office #3: 200 Michael Angelo Way, Austin, Texas, United States
Regional Office #4: 4120 N Co Rd 25E, Bellevue, Colorado, United States

Product Information 

Products:Dessert: Cheesecake bites in a variety of flavors
Frozen Meals: Ready to eat entrees and pizzas
Sauces: Red and white sauces for pasta and pizza topping
Pasta: Spaghetti, penne, linguine, and others
Soup: Lentil soup and butternut squash soup
Yogurt: Probiotic yogurts in a variety of flavors
Brands:Rao’s Homemade
Noosa Yogurt
Michael Angelo’s
Market Reach:United States

Financial Information 

Market Cap:USD $2.28 billion
Revenue:USD $878.3 million
Revenue per Employee:USD $1.27 million (i.e., USD $878.3 million / 690 employees = USD $1.27 million – estimated based on the number of employees and revenue from Pitchbook)
EBITDA:USD $573,000
P/E Ratio:N/A – Sovos Brands made a net loss in 2022
EV/EBITDA Ratio:40.5x

Did You Know?

The two companies each have strengths that they are enhancing with this acquisition. This will enhance Campbell’s one geography, two division plan by growing their Meals & Beverages and Snacks divisions, specifically within the Italian sauce category where Campbell’s does not have a presence yet, and scaling up their frozen meals categories with Rao’s Homemade and Michael Angelo’s offerings. Campbell’s has the market presence and expertise to broaden the reach of Sovos Brands, which is bringing their expertise in product innovation, and marketing of high-growth brands to strengthen Campbell’s portfolio.

Target/Seller Overview: Sovos Brands

Sovos Brands Inc. is a consumer-packaged food company focused on bringing great tasting, authentic flavors to people in forms that fit the way consumers live. The company’s product offerings include a variety of pasta sauces, dry pasta, soup, frozen entrees, frozen pizza, and yogurts, all of which are sold in North America under the brand names Rao’s Homemade, Michael Angelo’s, and noosa. The company was formed in 2017 and was publicly listed in 2021.

Sovos Brands is known for three brands: Rao’s Homemade, noosa yogurt, and Michael Angelo’s.

Buyer/Acquirer: Campbell Soup Company

Company Information

Buyer:Campbell Soup Company
Industry: Food Processing
Type:Publicly listed company (NYSE: CPB)
Employees:14,700 (Source: Pitchbook)
Locations:Head Office: 1 Campbell Place, Camden, New Jersey, United States

United States
Regional Office: 595 Westport Avenue, Norwalk, Connecticut, United States
Factory #1: 2120 NC 71 Highway North, Maxton, North Carolina, United States
Factory #2: 2041 Claremont Ave, Ashland, Ohio, United States
Factory #3: 12-773 State Route 110, Napoleon, Ohio, United States
Factory #4: 3150 Kettle Way, Beloit, Wisconsin, United States
Factory #5: 500 N.W. Loop 286, Paris, Texas, United States

Regional Office: 2845 Matheson Blvd E, Mississauga, Ontario, Canada

Regional Office: Insurgentes Sur 664-6, Mexico City, Mexico

Product Information 

Products:Bread: Variety of breads made of flour, water, and yeast
Cookies: Small, baked flat cakes made with stiff, sweetened dough
Desserts: Variety of pastries
Pasta: Spaghetti, penne, and others
Potato Chips: Thin slices of potato deep fried or baked until crunchy
Salsa: Mexican spicy sauce of chopped tomatoes, onions, and peppers
Sauces: Condiments, toppings, or relish with fluid-like consistency
Soup: Concentrated or ready-to-eat in various flavors
Cape Cod
Pace Foods
Pepperidge Farm
Market Reach:Available in 120 countries around the world, including:
North America: United States, Canada, Mexico
Europe: United Kingdom, Ireland, Germany, France
Latin and South America: Brazil, Argentina
Asia: China, Malaysia, Indonesia
Africa: South Africa
Australia: Australia, New Zealand

Financial Information

Market Cap:USD $13.1 billion
Revenue:USD $8.56 billion
Revenue per Employee:USD $582,449 (i.e., USD $8.56 billion / 14,700 employees = USD $582,449 – estimated based on the number of employees and revenue from Pitchbook)
EBITDA:USD $1.50 billion
P/E Ratio:16.4x
EV/EBITDA Ratio:12.9x

Buyer/Acquirer Overview: Campbell Soup Company

Campbell Soup Company is an American publicly listed company, most closely associated with its flagship canned soup products. Through mergers and acquisitions, it has grown to become one of the largest processed food companies in the United States with a wide variety of products under the Campbell’s soup brand as well as Pepperidge Farm, Snyder’s-Lance, Prego, Cape Cod, Goldfish, Kettle Brand, Milano, Pace, Pacific Foods, Swanson, and V8.

Campbell’s Meals & Beverages and Snacks divisions include the iconic brands of Campbell’s, Cape Cod, Kettle Brand, Snyder’s-Lance, Late July, Pace, Pacific Foods, Pepperidge Farm, Prego, Swanson, and V8.
Campbell Soup Company has been selling processed food for over 150 years.

Previous Acquisitions by Campbell Soup Company

  • Snyder’s-Lance (2017) – A producer of snack foods based in North Carolina, United States. The consideration paid was USD $6.1 billion.
  • Pacific Foods of Oregon (2017) – A producer of natural and organic foods based in Oregon, United States. The consideration paid was USD $700 million.
  • Garden Fresh (2015) – A supplier of fresh and organic produce. The company is based in Michigan, United States. The consideration paid was USD $231 million.
  • Kelsen Group (2013) – A producer of quality baked snacks based in Denmark.
  • Plum Organics (2013) – An organic baby food and toddler snack producer. The company is based in California, United States
  • Bolthouse Farms (2012) – A vertically-integrated farm company that produces beverages. The consideration paid was USD $1.6 billion.
  • Pace (1994) – A producer of a variety of salsas based in Texas, United States. The consideration paid was USD $1.1 billion.


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