Steensma B.V.’s Post

Exciting news from TCFG

The recent acquisition of Hostess Brands by J. M. Smucker caught the attention of food industry insiders and analysts alike, as the move marks a significant pivot by J. M. Smucker. The company is making a massive bet on the snack foods category at a time when some observers believe weight loss drugs like Wegovy may drastically reshape consumer behavior across the food industry. We will be keeping a close eye on the food & beverage industry over the next 18 months as major players like PepsiCo and The Coca-Cola Company grapple with the impacts of GLP-1 agonists. In the meantime, we’ve put together an industry report detailing the most pertinent trends, acquisitions, and acquirers in the industry to help you better understand the current market landscape. #foodandbeverage #industrytrends

The Campbell Soup Company has announced its acquisition of Sovos Brands, the parent company of Michael Angelo's and Rao's foods, #soups and #sauces lines, in a cash deal of $2.33 billion. This acquisition, priced at $23 per Sovos share, represents a 28% premium on Sovos' recent closing price. Following the announcement, Sovos' stock surged by 24.3% in early trading, while Campbell's shares dipped slightly by 1.9%. This development underscores a broader trend in the global #food and #beverage sector, which has witnessed a flurry of mergers and acquisitions. Reuters in a recent article noted the acquisition by Unilever of North American frozen yogurt brand Yasso, and Mars Inc. took over Kevin's Natural Foods. Meanwhile, #CampbellSoup divested its Emerald Nuts brand to Flagstone Foods earlier this year. More at #Proactive #ProactiveInvestors http://ow.ly/H49w104QtHE #NYSE #CPB

Campbell's has officially completed its last year acquisition of Sovos Brands for ~$2.7bn The US canned soups giant aims to premiumize its portfolio and shift it from low growth mid-tier soups/ condiments to more premium segments/ categories (2018 Snyder's Lance acquisition to enter Snacks business) Sovos is a $1bn revenue, fast growing (25% y-o-y) maker of premium sauces, pasta, soups, frozen entrees, pizzas and yogurts under the brands Rao’s, Michael Angelo’s and noosa, that has been one of the largest success stories in the otherwise rather stable sauces category (other than Huy Fong) Campbell didn't have an easy year with its market cap dropping 6% YTD and 23% y-o-y, and it counts on the acquisition of Sovos to turn its tides. As-is, Snacks, (~40% of the company's EBITDA), and Sovos Brands, (~10%) are to be the key growth engines expected to grow at high-single/ low-double digit growth over the next 3-5 yars. If this speaks well about Campbell acquisitions, it also highlights a structural problems with the organic growth profile of Campbell's categories/ markets footprint. And if M&A-driven growth is possible, it tends to be costly and less reliable in a long run (c.f. our article on M&A and Zero Based Growth in the first comment) #fmcg #cpg #strategy #mergersandacquisitions Frederic Fernandez & Associates

Breaking News: Campbell Soup completes its $2.7 billion acquisition of Sovos Brands! The deal includes premium products like Rao’s, Michael Angelo’s, and noosa, with net sales of $1 billion in 2023. Rao’s organic net sales increased 37%, generating $775 million in annual revenue. Campbell’s President and CEO, Mark Clouse, calls it a game-changer, turbocharging the company’s growth strategy by combining an enhanced Meals & Beverages division with a differentiated Snacks division. The new Distinctive Brands unit features Pacific Foods, Rao’s, Michael Angelo’s, and noosa. Campbell Soup expects this move to boost earnings per share within two years, making it a savory investment for shareholders. #CampbellSoup #SovosAcquisition #PremiumBrands #GrowthStrategy #DistinctiveBrands #FoodBusiness

Campbell's acquisition of Rao's pasta sauce brand has raised regulatory eyebrows, with the FTC focusing on potential market overlap. This move would increase Campbell's market share in pasta sauce from 19.3% to 36.3%, nearing levels that could trigger heightened regulatory scrutiny. However, experts suggest a low probability of successful litigation by the FTC, and it's unlikely they will block the deal. This acquisition would significantly boost Campbell's premium portfolio, pushing it beyond 25%. Sovos, which owns Rao's, has been experiencing rapid growth, making it a standout success story in the food industry. #FoodIndustry #Acquisitions #Regulation #foodandbev #logistics #supplychain #warehousing #3pls

I hope you ate a hearty breakfast this morning, or today's post is going to make you hungry. On Monday, there was a resurgence in stock market performance, corresponding with the gradual conclusion of the earnings season and the anticipation among investors regarding an upcoming inflation report. The S&P 500, Dow Jones, and Nasdaq Composite all ended in the green by 0.90%, 1.16%, and 0.61%, respectively. Campbell Soup (CPB), a leading producer of chicken noodle soup, announced that it planned to acquire Sovos Brands (SOVO), the manufacturer of Rao’s pasta sauce, for $2.7 billion. This acquisition will be executed at a price of $23 per share. The acquisition cost reflects a significant premium of 27% over the closing price of Sovos Brands on Friday. This acquisition represents Campbell’s most significant purchase since its $4.87 billion acquisition of Snyder’s-Lance, a well-known pretzel company, in 2018. Rao’s, which has only been public since 2021, is set to become a part of Campbell’s sauce portfolio, which currently includes the more affordable Prego brand and Swanson broths. During a conference call, Mark Clouse, the CEO of Campbell Soup, expressed that Sovos was an ideal match for the company. Shares of Sovos Brands experienced a significant increase of 25% to reach a trading value of $22.56. However, there was a decline in Campbell Soup shares by 2% to $44.43 which was caused by investor concerns regarding the financing of the deal through the issuance of additional debt. The CEO of Tyson Foods (TSN) is increasing efforts to enhance efficiency in response to the persistent challenges posed by macroeconomic conditions. The company disclosed its intention to shut down an additional four facilities, in response to underwhelming third-quarter performance that fell short of estimates. Why is this happening? According to CEO Donnie King, the closures are implemented as a short-term measure to enhance operational efficiency. According to his statement, the company’s primary objective is to achieve “profitable growth,” with a specific emphasis on the value-added industry. This includes the poultry segment as well as the prepared foods division, which currently generates a substantial revenue of $10 billion. What else? During the third quarter, Tyson Foods experienced a decline in sales due to the decrease in prices of chicken and pork, as well as a decrease in demand for beef. Total sales figures for the quarter experienced a decline of 3%. There is still hope! One notable aspect during the previous quarter was the increased popularity of prepared foods, particularly exemplified by the growing demand for frozen Jimmy Dean Biscuit Roll-ups. According to King, consumers are attracted by the “value-added convenience” offered by the availability of affordable, accessible, and sustainable foods.

Retained Search for North American Food Manufacturer A prominent $1B AUM, private equity firm has retained Focus Acquisition Partners to identify and assist in acquiring an established food or beverage manufacturer.  This consumer products focused group has completed over 100 transactions during their 25 year history, including many well-known food and beverage companies.     The ideal acquisition target company has the following characteristics: ·      US or Canadian based company with domestic manufacturing facilities ·      Branded, co-pack, or private label ·      Preference for natural or organic  ·      Revenue $25M ·      EBITDA $3M   Specific areas of interest: ·      Baked Goods ·      Sauces ·      Coffee and Tea ·      Ethnic Foods   If you have or know of an opportunity that meets these acquisition criteria, please contact us. Many transactions that Focus completes have sell side representation. Focus pays generous referral fees for introductions that lead to a completed transaction Contact us: Chris Nesbitt, Partner [email protected] 508-769-1878 David Parsons, Partner [email protected] 603-277-9481

Premier Foods PLC has made its entry into the breakfast market with the acquisition of FUEL10K for an enterprise value of £34 million. Added to larder cupboard staples such as Mr Kipling and Ambrosia. Alex Whitehouse, FUEL10K has been identified as an "ideal platform" for Premier's category expansion. This strategic move follows the company's successful integration of The Spice Tailor, a previous acquisition that yielded increased revenue and profit. Recent trading updates for Premier Foods have been favourable, with a year-on-year group sales increase of 21.1%, largely attributed to its grocery and sweet treats categories. Premier shares were up 0.7% at 114p in early trading. Investment bank Peel Hunt said the stock remains good value at just 9 times earnings as it set a price target of 157p. Analysts at Shore Capital added: "We welcome the deal, demonstrating the material miss-rating of a fine firm." More at #Proactive #ProactiveInvestors #LSE #PFD #premierfood http://ow.ly/bKgN104Zvnl

#PE-backed Legacy Food Group invested on undisclosed terms in four regional #food #distributors, a Restaurant Business Online article says. The #privateequity firm is Quad-C Management, Inc. in Charlottesville, Va. The four firms are Keck's Food Service in Pennsylvania, M&V Provisions in New York, Thomsen Foodservice in Rhode Island, and Legacy Foodservice Alliance, LLC. The companies serve smaller shops — bakeries delis, bagel shops and bodegas, among them — in general #foodservice and #supplies. UniPro Foodservice is also involved as an investor on the deal. Geographically, the acquisitions so far cover the U.S. Northeast and stretch, via Legacy Foodservice Alliance's work with 'hyperlocal' distributors, into an Americas and Caribbean reach. More acquisitions are expected. Information from: RBO, a Quad-C press release, PE Hub, and a Law.com item noting that, "Quad-C was advised by a Gibson Dunn & Crutcher team led by partner Andrew Herman." https://lnkd.in/gRQxqdGP #food #restaurants #mergersandacquisitions