Campbell Soup eyeing ‘specific targets’ in all divisions

Provided exclusively by Mergermarket

Campbell Soup (NYSE:CPB) is looking for potential acquisitions in all its business segments, according to CEO Denise Morrison.

On the 4Q16 earnings call held 1 September, Wells Fargo analyst John Baumgartner asked how the company would assess the potential for M&A to accelerate growth in the US snacking market, and if it would look outside the Campbell Fresh segment for deals.

“We do look at M&A more broadly than just Campbell Fresh. And each one of our divisions has mapped out specific targets that they’re interested in, that are a good strategic fit for their businesses,” Morrison said. “We are highly interested in other consumer behaviors like health and well-being, like snacking, like simple meals, that we can pursue not only from an organic growth standpoint but also from an M&A standpoint.”

Asked if the company’s route to market at its Pepperidge Farm brand allowed it to buy smaller artisanal brands, the CEO replied affirmatively.

Plum Organics is a great example of a smaller brand that we bought,” she said. “We were able to integrate that into the Americas Simple Meals and Beverage business and capitalize on things like their sales force and supply chain.”

Campbell reports in the following segments: Americas Simple Meals and Beverages; Global Biscuits and Snacks; and Campbell Fresh.

Campbell said in June last year it would buy Michigan-based Garden Fresh, a provider of branded refrigerated salsa, for USD 231m. In a press release announcing the deal, Campbell said it had added a “trio of growth engines” to its business in the past several years, acquiring Bolthouse Farms in 2012, and organic baby-food company Plum Organics and biscuit company Kelsen in 2013. The release noted that these deals were made in response to increased consumer interest in fresh foods and health and well-being.

Morgan Stanley and Davis Polk & Wardwell advised on the Bolthouse acquisition. Davis Polk has also been used for other domestic deals including Plum, according to the Mergermarket M&A database. Morgan Lewis & Bockius advised on the Garden Fresh transaction. In-country law firms have been used on several occasions, including Bruun & Hjejle for the Denmark-based Kelsen purchase.

Camden, New Jersey-based Campbell has a market capitalization of USD 17.8bn.

As seen in the mergermarket newsletter on 06/09/2016


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