- Strengthens and diversifies Campbell’s Meals & Beverages
portfolio with additional high-growth brands including premium
market-leading Rao’s sauce, along with Michael Angelo’s and
noosa
- Risa Cretella from Sovos Brands to lead new Distinctive Brands
unit within Meals & Beverages division
- Significant long-term shareholder value creation expected
through meaningful sales and earnings growth contribution
Campbell Soup Company (NYSE: CPB) today announced it has
completed the acquisition of Sovos Brands, Inc. (“Sovos Brands”)
for $23 per share in an all-cash transaction, which represents a
total enterprise value of approximately $2.7 billion.
“This important milestone in Campbell’s history adds several
market-leading and scaled premium brands to our company,” said
Campbell’s President and CEO Mark Clouse. “It accelerates
Campbell’s successful strategy and provides a substantial runway
for sustained profitable growth. An enhanced Meals & Beverages
division paired with our differentiated Snacks division creates an
advantaged portfolio that makes Campbell one of the most dependable
and growth-oriented large capitalization value names in food.”
The Sovos Brands portfolio consists of a variety of premium
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 Brands recently reported $1.0 billion in
net sales for the year ended Dec. 30, 2023 with an organic net
sales increase of 25%1 year over year. Rao’s organic net sales
increased 37%2, generating $775 million in annual revenue as it
continued its march toward becoming a $1 billion brand.
New Distinctive Brands Business Unit within Meals &
Beverages Combines Acquired Brands with Pacific Foods to Drive
Accelerated Growth
To drive the continued growth trajectory of these premium
brands, the company has formed a new business unit within the Meals
& Beverages division called Distinctive Brands. Pacific Foods,
a significant growth engine since it was acquired in December 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 U.S. Retail, Canada and Foodservice.
Distinctive Brands will be led by Risa Cretella, Senior Vice
President and General Manager, and will have dedicated teams
supported by Campbell’s scaled capabilities. Cretella most recently
served as Chief Sales Officer at Sovos Brands. She will report to
Mick Beekhuizen, Campbell’s Executive Vice President and President,
Meals & Beverages.
“We’re excited to welcome the talented Sovos team to Campbell,”
said Beekhuizen. “Risa is an accomplished leader with a strong
record of growth and impact at Sovos, which makes her the right
person to lead the Distinctive Brands business unit and build upon
the trajectory and incredible momentum of these premium brands. Our
Distinctive Brands business unit will fuel the transformation of
our Meals & Beverages categories to accelerate growth.”
The noosa brand is a well-run business supported by a dedicated
team. As stated when the acquisition was announced, Campbell plans
to evaluate strategic alternatives for the brand.
Significant Long-term Shareholder Value Creation Through
Sales and Earnings Growth Contribution
The company expects a fast and effective integration given
Campbell’s familiarity with the categories and its strong
capabilities, processes and proven integration playbook.
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.
Campbell’s supply chain excellence and scale are expected to
drive operating synergies, while improving scale efficiency of
Campbell’s core operations. The company expects annualized cost
synergies to reach approximately $50 million over the next two
years.
Campbell will discuss the impact of the acquisition to its
fiscal 2024 guidance when the company reports third-quarter
earnings in June.
About Campbell For more than 150 years, Campbell
(NYSE:CPB) has been connecting people through food they love.
Generations of consumers have trusted us to provide delicious and
affordable food and beverages. Headquartered in Camden, N.J. since
1869, the company generated fiscal 2023 net sales of $9.4 billion.
Our portfolio includes iconic brands such as Campbell’s, Cape Cod,
Goldfish, Kettle Brand, Lance, Late July, Milano, Michael Angelo’s,
noosa, Pace, Pacific Foods, Pepperidge Farm, Prego, Rao’s, Snyder’s
of Hanover, Swanson and V8. Campbell has a heritage of giving back
and acting as a good steward of the environment. The company is a
member of the Standard & Poor’s 500 as well as the FTSE4Good
and Bloomberg Gender-Equality Indices. For more information, visit
www.campbellsoupcompany.com.
Forward-Looking Statements Certain statements in this
press release regarding the transaction, including any statements
regarding the expected benefits of the transaction, future
opportunities, future financial performance and any other
statements regarding future expectations, beliefs, plans,
objectives, financial conditions, assumptions or future events or
performance that are not historical facts are “forward-looking”
statements made within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. The words “aim,” “anticipate,” “believe,”
“could,” “ensure,” “estimate,” “expect,” “forecasts,” “if,”
“intend,” “likely” “may,” “might,” “outlook,” “plan,” “positioned,”
“potential,” “predict,” “probable,” “project,” “should,”
“strategy,” “target,” “will,” “would,” and similar expressions, and
the negative thereof, are intended to identify forward-looking
statements.
All forward-looking information is subject to numerous risks and
uncertainties, many of which are beyond the control of Campbell,
that could cause actual results to differ materially from the
results expressed or implied by the statements. These risks and
uncertainties include, but are not limited to:
- long-term financing for the transaction may not be obtained by
Campbell on favorable terms, or at all;
- the risk that the cost savings and any other synergies from the
transaction may not be fully realized by Campbell or may take
longer or cost more to be realized than expected, including that
the Sovos Brands transaction may not be accretive to Campbell
within the expected timeframe or the extent anticipated;
- the risks related to the availability of, and cost inflation
in, supply chain inputs, including labor, raw materials,
commodities, packaging and transportation;
- Campbell’s ability to execute on and realize the expected
benefits from its strategy, including growing sales in snacks and
growing/maintaining its market share position in soup;
- the impact of strong competitive responses to Campbell’s
efforts to leverage its brand power with product innovation,
promotional programs and new advertising; the risks associated with
trade and consumer acceptance of product improvements, shelving
initiatives, new products and pricing and promotional
strategies;
- the ability to realize projected cost savings and benefits from
cost savings initiatives and the integration of recent
acquisitions;
- disruptions in or inefficiencies to Campbell’s supply chain
and/or operations, including reliance on key supplier
relationships;
- the risks related to the effectiveness of Campbell’s hedging
activities and Campbell’s ability to respond to volatility in
commodity prices;
- Campbell’s ability to manage changes to its organizational
structure and/or business processes, including selling,
distribution, manufacturing and information management systems or
processes; changes in consumer demand for Campbell’s products and
favorable perception of such brands;
- changing inventory management practices by certain of
Campbell’s key customers;
- a changing customer landscape, with value and e-commerce
retailers expanding their market presence, while certain of the
Campbell’s key customers maintain significance to Campbell’s
business; product quality and safety issues, including recalls and
product liabilities;
- the possible disruption to the independent contractor
distribution models used by certain of Campbell’s businesses,
including as a result of litigation or regulatory actions affecting
their independent contractor classification;
- the uncertainties of litigation and regulatory actions against
Campbell’s;
- the costs, disruption and diversion of management’s attention
associated with activist investors;
- a disruption, failure or security breach of Campbell’s or
Campbell’s vendors' information technology systems, including
ransomware attacks;
- impairment to goodwill or other intangible assets;
- Campbell’s ability to protect its intellectual property
rights;
- increased liabilities and costs related to Campbell’s defined
benefit pension plans;
- Campbell’s ability to attract and retain key talent and other
employees, which might require Campbell to use more expensive or
less effective resources to support its businesses;
- goals and initiatives related to, and the impacts of, climate
change, including weather-related events;
- negative changes and volatility in financial and credit
markets,
- deteriorating economic conditions and other external factors,
including changes in laws and regulations; and
- unforeseen business disruptions or other impacts due to
political instability, civil disobedience, terrorism, geopolitical
conflicts (including the ongoing conflicts between Russia and
Ukraine and in Israel and Gaza), extreme weather conditions,
natural disasters, other pandemics or other calamities
Additional information concerning these and other risk factors
can be found in Campbell’s filings with the SEC and available
through the SEC’s Electronic Data Gathering and Analysis Retrieval
system at http://www.sec.gov, including Campbell’s most recent
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
The discussion of uncertainties is by no means exhaustive but is
designed to highlight important factors that may impact the outlook
of Campbell. Campbell disclaims any obligation or intent to update
the forward-looking statements in order to reflect events or
circumstances after the date of this release except as required by
law.
__________________________________________ 1 Sovos Brands
Organic Net Sales and Organic Net Sales growth are defined as
Reported Net Sales or Reported Net Sales growth excluding, when
they occur, the impact of a 53rd week of shipments, acquisitions,
and divestitures. Refer to non-GAAP reconciliation 2 Reflects Net
Sales generated in the 53rd week of Fiscal Year 2022 by Rao’s
brand. Refer to non-GAAP reconciliation
Non-GAAP Financial Measures This press release includes
measures that are not prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”). Campbell uses Sovos Brands
organic net sales, which are non-GAAP measures, in this press
release. For these non-GAAP financial measures, we have included
below a reconciliation of the differences between the non-GAAP
measure and the most comparable GAAP measure. These non-GAAP
measures should be viewed in addition to, and not in lieu of, the
comparable GAAP measure.
Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of Sovos Brands Reported
Net Sales to Organic Net Sales:
Fiscal Year Ended
($ millions)
December 30, 2023
December 31, 2022
Reported Net Sales
$
1,020.4
$
878.4
Divestiture(1)
-
(41.2
)
53rd Week(2)
-
(18.3
)
Organic Net Sales(3)
$
1,020.4
$
818.9
Organic Net Sales Growth
Rate(3)
25
%
(1)
Reflects Net Sales for the Birch Benders
brand generated in the 53 weeks ended December 31, 2022.
(2)
Reflects Net Sales generated in the 53rd
week of Fiscal Year 2022 by the Rao’s, Michael Angelo’s and noosa
brands.
(3)
Sovos Brands Organic Net Sales and Organic
Net Sales growth are defined as Reported Net Sales or Reported Net
Sales growth excluding, when they occur, the impact of a 53rd week
of shipments, acquisitions, and divestitures.
Reconciliation of Rao’s Reported Net Sales to Organic Net
Sales:
Fiscal Year Ended
($ thousands)
December 30, 2023
December 31, 2022
Reported Net Sales
$
774,706
$
580,088
53rd Week (1)
-
(13,743
)
Organic Net Sales
$
774,706
$
566,345
Organic Net Sales Growth
37
%
(1)
Reflects Net Sales generated in the 53rd
week of Fiscal Year 2022 by Rao’s brand
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240311569296/en/
Investors Rebecca_Gardy@campbells.com
Media James_Regan@campbells.com
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