The king of chicken noodle soup said on Monday it would pay $2.7 billion — or $23 a share — to acquire Rao's pasta sauce maker Sovos Brands. The purchase price represents a 27% premium to Sovos Brands' closing price on Friday.
It marks Campbell's largest acquisition since it plunked down $4.87 billion to buy pretzel leader Snyder's-Lance in 2018.— will join a Campbell sauce portfolio consisting of lower priced Prego and Swanson broths. The company posted $878.4 million in net sales last year and $67.8 million in net income.
This year, Wall Street was expecting Sovos Brands to post net sales and net income of $941.4 million and $75 million, respectively. A source familiar with the matter tells Yahoo Finance that Sovos' pipeline of future products and Rao's strong growth were the determining factors in doing the deal.said on a conference call Sovos was a "perfect fit", while downplaying concerns the integration would be a distraction.
Sovos Brands shares rose 25% to $22.56 in trading on Monday morning. Campbell Soup shares fell 2% to $44.43 likely as investors fretted over the deal being financed with new debt.
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