Campbell Soup Co. has struck a deal to acquire fellow US food manufacturer Sovos Brands.

The agreement values Sovos, the owner of brands including Michael Angelo’s frozen meals and Noosa yogurt, at $2.7bn.

Sovos’ best-selling brand is Rao’s, under which the business sells sauces, soups, pasta and frozen meals.

Campbell, home to Prego pasta sauces as well as Campbell’s soup, described Rao’s as a “premium, market-leading” brand. Rao’s accounted for 69% of Sovos Brands’ “adjusted” net sales in the company’s 2022 financial year, Campbell said.

“This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well,” Campbell president and CEO Mark Clouse said.

“The Sovos Brands portfolio strengthens and diversifies our meals and beverages division and, paired with our faster-growing and differentiated snacks division, makes Campbell one of the most dependable, growth-oriented names in food.”

Sovos Brands was set up in 2017 by private-equity firm Advent International.

Advent formed Sovos with the aim of growing it into a “scale player” in the US consumer goods sector with a portfolio of brands that it plans to build and acquire. That year, the company bought two US businesses: Michael Angelo’s Gourmet Foods and Rao’s Specialty Foods. Sovos followed those deals with one in 2018 – Noosa – and in 2020, when it acquired Birch Benders, a producer of pancake and waffle mixes.

In 2021, Sovos was floated on Nasdaq.

Last year, the company generated net sales of $878.4m, up 22.1% on 2021.

The group posted a net loss of $53.5m due to a “loss on asset sale” linked to the disposal of Birch Benders. Sovos sold the business to Hometown Food Co., a baking brands platform owned by investment firm Brynwood Partners, earlier this year.

Adjusted net income grew 11.3% in 2022 to $60.4m.

Campbell said the $2.7bn enterprise value the planned acquisition places on Sovos represents an “adjusted EBITDA multiple” of 14.6 times, including “expected annual run rate synergies of approximately $50m”.

Todd Lachman, Sovos’ founder, president and CEO, said: ““We have built a one-of-a-kind, high growth food company focused on taste-led products across a portfolio of premium brands, anchored by the Rao’s brand. This transaction is expected to create substantial value for our shareholders, resulting in a 92% increase from our 2021 IPO price.”

The deal has been approved by the boards of both companies. Campbell expects to finalise the transaction by the end of the year.

In pre-market trading, Campbell’s share price stood at $44.36 at 12:20 BST. The shares closed on Friday at $45.15.

PepsiCo and General Mills have led the list of major food companies hiring for roles linked to AI so far in 2023, data suggests.

The US giants had the most AI-related jobs open for application among food manufacturers in the first seven months of the year, GlobalData, Just Food’s parent, said.

Between 1 January and 31 July, PepsiCo was advertising 150 positions linked to artificial intelligence, followed by General Mills with 123 open roles.

GlobalData’s job analytics database tracks daily job postings across multiple industries, including consumer goods. As part of the research and intelligence company’s analysis, it groups jobs by theme, providing an indication of where businesses are focusing their hiring efforts.

Nestlé ranked third, with 80 “active” AI-related roles at the KitKat maker. “Active” jobs denote roles open for application.

Unilever (with 52) and Mondelez International (31) rounded out the top five.

Overall, among the food companies monitored by GlobalData, some 896 posts were open for application during the period that were tied to AI.

Our signals coverage is powered by GlobalData’s Disruptor data, which tracks all major deals, patents, company filings, hiring patterns and social media buzz across our sectors. These signals help us to uncover key innovation areas in the sector and the themes that drive them. They tell us about the topics on the minds of business leaders and investors, and indicate where leading companies are focusing their investment, deal-making and R&D efforts. 

Nestlé is set to invest 2.7bn reais ($550.8m) into its chocolate and biscuit operations in Brazil up to 2026.

The funding itself is triple the amount invested in the last four years in Brazil, according to Nestlé.

The Swiss giant will mainly put the investment towards expanding and modernising production lines at factories in Caçapava and Marília in São Paulo, as well as in Vila Velha in Espírito Santo. These facilities employ more than 4,000 people and are export hubs for over 20 countries.

In Caçapava, Nestlé produces the KitKat brand, while in Vila Velha, production is focused on the Garoto brand of chocolates. The Marília unit manufactures biscuits.

Two months ago, Nestlé received the green light to acquire Garoto more than two decades after signing an agreement to buy the Brazilian chocolate maker.

The world’s largest food maker struck a deal to acquire Garoto in 2002 but has been awaiting full competition clearance.

Nestlé has been able to keep investing at the Garoto production site in Vila Velha in eastern Brazil, although it has had to keep management separate.

Through its new investment package, Nestlé will also aim to accelerate the development of new products and expand ESG actions in its operations.

The group has also planned to expand the Nestlé Cocoa Plan sourcing programme, which has been in operation in Brazil since 2010. The scheme encourages regenerative agriculture practices in the cocoa supply chain, Nestlé said.

Patricio Torres, vice president of biscuits and chocolates for Nestlé’s Brazilian arm, said: “Nestlé’s Brazilian operation has been growing consistently and sustainably over the years. In the last 12 months alone, we have seen an increase of 24%, based on the high demand in Brazil for the chocolate and biscuit portfolio.”

Overall, the company employs more than 30,000 people in Brazil and has 20 industrial units and nine distribution centres.

In February 2022, Nestlé revealed that it was increasing it investment in the South American country to more than 1.8bn reais for that year, investing in areas including production, distribution and technology.

The KitKat maker’s first-half net sales for 2023 amounted to SFr46.29bn ($53bn) while its Zone Latin America comprised over SFr6bn of that.

Brazil posted “double-digit growth” for the period.

Nestlé said: “By product category, confectionery was the largest growth contributor, reflecting strong demand for KitKat and key local brands as well as new product launches.”