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Camden, New Jersey – campbell soup The Company (NYSE:) announced that it has completed its acquisition of Sovos Brands, Inc. for $23 per share in an all-cash transaction valued at approximately $2.7 billion. The acquisition brings premium brands such as Rao's Sauce, Michael Angelo's and Noosa to Campbell's Meals & Beverages portfolio.
Mark Clouse, president and CEO of Campbell, said the acquisition is an important milestone for the company, accelerating the company's strategy and presenting a significant opportunity for sustained profitable growth. said it would provide. The addition of these brands is expected to contribute to long-term shareholder value creation through increased sales and profits.
Sovos Brands reported net sales of $1.0 billion for the year ended December 30, 2023, an increase of 25% in organic net sales compared to the prior year. Rao's, the portfolio's flagship brand, grew organic net sales by 37%, reaching $775 million in annual revenue.
To drive further growth, Campbell has created a new Distinctive Brands business unit within its Food & Beverage division. The division will integrate Pacific Foods, acquired in December 2017, and newly acquired brands to accelerate growth. Lisa Cretella, former chief sales officer at Sovos Brands, will lead the new division and report to Mick Beekhuizen, Campbell's executive vice president and president of food and beverage.
Mr. Campbell expects the integration of the Sovos brand to be accomplished quickly and efficiently, leveraging the company's strong capabilities and integration strategy. The company expects cost synergies of approximately $50 million per year over the next two years and expects the transaction to generate approximately $50 million in adjusted diluted costs by the second year of ownership, excluding integration costs and costs to achieve synergies. We expect earnings per share to increase.
The impact of the acquisition on Campbell's 2024 outlook will be discussed in the company's third quarter earnings report in June. Campbell's supply chain expertise is expected to drive business synergies and improve scale efficiencies in the core business.
This news article is based on a press release statement from Campbell Soup Company.
Investment Pro Insights
Campbell Soup Company's ( NYSE:CPB ) recent acquisition of Sovos Brands has generated significant interest in the company's financial health and future prospects. According to InvestingPro data, Campbell Soup has a solid market capitalization of $12.82 billion and a price-to-earnings ratio (P/E) of 16.72, reflecting investors' confidence in the company's earnings power. ing. Adjusted for the trailing twelve months as of Q2 2024, the P/E ratio is slightly better at 14.46, suggesting improved profitability compared to the company's market value over this period.
According to InvestingPro Tips, Campbell Soup has a commendable track record of maintaining its dividend for 54 consecutive years, despite some analysts lowering their earnings forecasts for next year. This speaks to the company's financial stability and commitment to shareholder returns. Moreover, analysts expect the company to remain profitable this year, a sentiment supported by the company's profitability over the past 12 months.
The company's revenue growth is moderate, increasing by 1.02% over the past 12 months as of Q2 2024, and the gross profit margin is at a good level of 31.43%. These numbers, combined with the expected synergies from the Sovos Brands acquisition, could position Campbell Soup Co. well for future growth.
For investors looking to dig deeper into Campbell Soup's financial metrics and access additional insights, InvestingPro provides a comprehensive suite of tools and tips. For more on Campbell Soup, check out his other InvestingPro tips, available at https://www.investing.com/pro/CPB.Interested readers can use the coupon code pro news 24 Get an extra 10% off annual or biennial Pro and Pro+ subscriptions and access rich financial data and expert analysis to make investment decisions.
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