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Campbell Soup has completed the acquisition of Sovos Brands for $23 per share in an all-cash transaction. The deal represents a total enterprise value of approximately $2.7 billion. As previously reported by FoodBev, the two companies announced the acquisition in August 2022. In October 2023, completion of the deal was delayed due to a request for additional information from the US Federal Trade Commission. Originally projected to close in Q4 2023, the delay was predicted to push this into mid-2024.

This week, the completed purchase has been announced, described by Campbell’s president and CEO, Mark Clouse, as an “important milestone” in the company’s history. The Sovos Brands portfolio consists of a variety of food products including pasta sauces, dry pasta, soups, frozen entrées, frozen pizza and yogurts under the brand names Rao’s, Michael Angelo’s and Noosa. Sovos recently reported $1 billion in net sales for the full year of 2023, with an organic net sales increase of 25% year-over-year. Rao’s organic net sales increased 37%, generating $775 million in annual revenue. A new business unit will be formed within Campbell’s Meals & Beverages portfolio, named Distinctive Brands. Campbell’s Pacific Foods business, acquired by the company in 2017, will be paired with Rao’s, Michael Angelo’s and Noosa to form the unit. The other three business units in the Meals & Beverages division are US Retail, Canada and Foodservice. Distinctive Brands will have dedicated teams supported by Campbell’s scaled capabilities. The unit will be led by Risa Cretella, senior VP and general manager, who most recently served as chief sales officer at Sovos. She will report to Mick Beekhuizen, Campbell’s executive VP and president, Meals & Beverages. Campbell said it expects a ‘fast and effective’ integration due to its familiarity with the categories and its capabilities, scale and supply chain, expected to drive operating synergies and improve efficiency. The transaction is expected to be accretive to adjusted diluted earnings per share by the second year of ownership, excluding one-time integration expenses and costs to achieve synergies. The company expects annualised cost synergies to reach approximately $50 million over the next two years. Campbell will discuss the impact of the acquisition on its fiscal 2024 guidance when the company reports its Q3 earnings in June.