The Campbell Soup Company is expanding its presence on grocery store shelves with a new deal to acquire Sovos Brands Inc., the maker of Rao's pasta sauces and noosa yogurt.
At $23 per share, the total enterprise value of the acquisition is approximately $2.7 billion, the companies announced in a joint press release on Monday.
MORE: This vodka sauce recipe is your key to perfect pasta
The premium pasta sauces first hit shelves in 1992 to bring home cooks a signature taste of the legendary 10-table New York City restaurant.
The Campbell's meals and beverages division made the "strategic decision" to add a "high-growth, market-leading premium portfolio" to include more soups, dry pasta, frozen products and yogurts from the brand names Rao's, Michael Angelo's and noosa.
MORE: Cheesesteak restaurant owner explains his secret sauce, the viral Malibu Barbie Dream DrizzleRao’s represented approximately 69% of Sovos Brands, the companies stated, which has had 34.9% organic growth in sales compared to last year.
“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. "This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well."
In addition to strengthening the meals and beverages division, Clouse said it adds to their "faster-growing and differentiated snacks division."
Todd Lachman, Founder, President and CEO of Sovos Brands, Inc. called it a "momentous occasion" for the company.
MORE: Ed Sheeran dips into condiments with new Tingly Ted's hot sauce"Our success would not have been possible without the incredibly talented and passionate team at Sovos Brands, which has been instrumental in building one of the fastest-growing food companies of scale in the industry today," Lachman said. "This transaction is expected to create substantial value for our shareholders, resulting in a 92% increase from our 2021 IPO price."
Lachman said he's "confident in Campbell’s ability to continue bringing our products to more households and further building on our track record of growth and success for years to come."
