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Campbell Soup Co. has entered into an agreement to acquire Pacific Foods, a manufacturer of organic broth and soup, as well as shelf-stable plant-based beverages and other meals and sides, for $700 million in cash. The deal will ramp up Campbell’s efforts to deliver products that meet consumers’ evolving tastes and preferences, and advance its goal of driving innovation in health and well-being to reinvent the center store, while providing greater access to natural and organic customers and channels.
“This acquisition is consistent with our purpose, ‘Real food that matters for life’s moments,’” said Denise Morrison, president and CEO of Camden, N.J.-based Campbell. “Pacific is an authentic brand with a loyal consumer following. The acquisition allows us to expand into faster-growing spaces such as organic and functional food. Moreover, Pacific Foods is an excellent fit with Campbell — strategically, culturally and philosophically. It advances our strategic imperatives around real food, transparency, sustainability and health and well-being. Culturally, Campbell and Pacific Foods share similar values and a commitment to a purpose-driven approach. Philosophically, both companies believe in making food that we are proud to serve at our own tables using simple, recognizable ingredients.”
Under the deal, Pacific will become part of Campbell’s Americas Simple Meals and Beverages division, including Campbell’s soup, simple meals and shelf-stable beverage units in the United States, Canada and Latin America. Led by President Mark Alexander, the division includes such well-known brands as Campbell’s, V8, Swanson, Prego, Pace and Plum Organics.
Campbell plans to invest in Tualatin, Ore.-based Pacific to drive full force growth. This will include expanding distribution, boosting marketing support for brand building to engage consumers and shoppers, and investing in R&D and the supply chain. Pacific Foods will continue to operate out of Tualatin, where it employs about 540 workers and operates a certified-organic plant, and CEO and co-founder Chuck Eggert will remain as a supplier of key ingredients through his family farms.
“We've spent the past 30 years focused on making nourishing foods, with an emphasis on simple, organic ingredients and authentic, rich flavors,” noted Eggert. “Looking ahead, a future with Campbell means we can maintain what we value while accelerating growth of the brand in a way that we couldn't do alone, reaching more people while increasing our impact on sustainable agriculture.”
The acquisition is Campbell’s fifth in five years as it diversifies its portfolio in response to rising consumer interest in health and well-being. The company acquired Bolthouse Farms in 2012, organic baby-food company Plum and biscuit company Kelsen in 2013, and fresh salsa and hummus maker Garden Fresh Gourmet in 2015.
Campbell plans to fund the acquisition of Pacific through a combination of short- and long-term debt, and expects it to be neutral to earnings in the first 12 months following the closing, excluding certain purchase accounting adjustments, and transaction and integration costs.
Pepper Hamilton LLP and Jones Day acted as Campbell's legal counsels, while Pacific was advised by The Rondout Group, and Tonkon Torp LLP acted as legal counsel.