Campbell Soup announced on Monday that it will acquire Sovos Brands, the parent company of Michael Angelo’s and Rao’s, for $2.33 billion in cash. The move marks a strategic expansion of Campbell’s meals and beverages segment by incorporating Sovos’ premium Italian sauces.
“We’re thrilled to add the most compelling growth story in the food industry and welcome the talented employees who have built a nearly $1 billion portfolio,” Campbell’s president and CEO Mark Clouse said in a statement. “The Sovos Brands portfolio strengthens and diversifies our Meals & Beverages division and paired with our faster-growing and differentiated Snacks division, makes Campbell one of the most dependable, growth-oriented names in food.”
Under the agreement, Campbell will pay $23 per share for Sovos, marking a premium of nearly 28% over the stock’s previous closing price. Sovos Chief Executive Todd Lachman said the transaction is a 92% increase from the company’s initial offering price in 2021, per The Wall Street Journal.
The transaction between Campbell and Sovos is anticipated to conclude by the close of December.
The original Rao’s location in East Harlem, New York, New York. Michael M. Santiago | Getty Images
What Is Rao’s?
While Rao’s line of signature Italian sauces, soups, and frozen meals are available at grocers across the country, the company has a long history starting in 1896 with a family-owned East Harlem restaurant, famous for its comforting Italian fare with options ranging from classic meatballs to seafood salad.
Reservations are close to impossible to get, even for savvy New Yorkers. Grub Street once lamented that “you would have better luck getting invited to dinner at the White House.”
Almost a century after the restaurant’s founding, then-fourth-generation co-owner Frank Pelligrino founded Rao’s Specialty Foods to bring the flavors from the Harlem storefront to homes across the country. In 2017, the brand was acquired by Sovos for an undisclosed amount.
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Now, the brand offers dozens of products ranging from sauce, pasta, and frozen meals available in stores across the country and two additional restaurant locations in Las Vegas and Los Angeles — operated by Rao’s Restaurant Group.
Meanwhile, the original Rao’s location has thrived with age. During the pandemic, the restaurant pivoted to takeout for the first time in its then 124-year-old history, which let many locals try the signature lemon chicken for the first time.
