Shares of consumer packaged food products provider Sovos Brands (NASDAQ:SOVO) are up a massive 25% today after it agreed to be acquired by Campbell Soup Company (NYSE:CPB) at an enterprise value of $2.7 billion.
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The $23 per share acquisition tag points to a 14.6x adjusted EBITDA multiple for Sovos and the transaction is expected to boost Campbell’s Meals and Beverage division with the addition of new brands including Rao’s, noosa, and Michael Angelo’s. Importantly, the move is part of Cambell’s goal of creating a $1 billion sauces vertical by foraying into the pasta sauce market.
The acquisition has received the blessings of the Boards of both companies and is anticipated to close by December 2023.
Separately, Sovos also announced second-quarter numbers today with net sales rising 10.2% year-over-year to $217.6 million on the back of pricing and volume gains. During the quarter, momentum also continued at Rao’s with a rise of 29.3% in net sales. Net income per share at $0.17 came in well ahead of expectations by $0.04.
With today’s price gains, Sovos shares have now popped nearly 31% so far this year. Meanwhile, Campbell Soup shares are trending 1.7% lower at the time of writing.
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