Aug 7, 2023 - Economy

Campbell Soup buys Rao's parent company for $2.7 billion

Rao's sauce.

Rao's sauces. Photo: Spencer Platt/Getty Images

Campbell Soup announced on Monday that it has purchased Sovos Brands for about $2.7 billion.

Why it matters: Campbell will bolster its offerings considerably with this purchase — adding Rao's sauces, Michael Angelo's frozen foods, Noosa yogurts and other premium products to its range.

The big picture: Sovos has grown over the years, with an annual organic net sales growth rate of 28% from 2019 to 2022 fiscal years, Campbell noted in a statement Monday.

  • Rao's accounted for 69% of Sovos' adjusted net sales in 2022, increasing its organic net sales by 34.9% compared to the previous year.
  • Sovos said in its statement that the purchase would lead to wider distribution and more shelf space for its items.

What they're saying: "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," said Todd Lachman, the founder, president and CEO of Sovos in a statement.

What's next: The deal is set to close by the end of December, per the announcement.

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