The company that makes Rao’s pasta sauces, Sovos Brands, will be acquired by Campbell Soup. The two businesses announced on Monday that they had reached an agreement for Campbell’s to buy Sovos for $23 per share in cash, which would give the combined company a market value of nearly $2.7 billion.
According to a statement from Mark Clouse, president and chief executive officer of Campbell, the deal will help diversify and improve Campbell’s Meals & Beverages division.
Campbell is now one of the most dependable, growth-oriented names in food thanks to the Sovos portfolio, he continued, “especially when combined with our faster-growing and distinctive Snacks division.”
Campbell’s also produces Prego sauce and Goldfish crackers in addition to its name-brand soups. Sovos also sells dry pasta, soups, frozen dinners, and yogurt under the labels Michael Angelo’s and Noosa, in addition to Rao’s sauces. Rao’s, which accounted for nearly 69% of Sovos’ $837 million in adjusted net sales last year, is the company’s most well-known brand, according to a press release on Monday.
According to Todd Lachman, founder, president, and CEO of Sovos Brands, “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.
“As one of the most dependable and well-respected food companies in North America, I have faith in Campbell’s ability to expand the distribution of our products and maintain our track record of success for years to come.”
With the purchase price nearly doubling the $12 that Sovos Brands priced its initial public offering in September 2021, Lachman continued, the transaction “creates substantial value” for shareholders.
The transaction will be financed by Campbell issuing new debt, according to the announcement made on Monday. Subject to Sovos stockholder, regulatory, and other closing conditions approval, the deal is anticipated to close in December.