SOVO - Sovos Brands closes on sale of Birch Benders

Sovos Brands ( NASDAQ: SOVO ) announced that it completed the divestiture of the Birch Benders brand and related assets to Hometown Food Company for an undisclosed amount.

The company believes the deal will help it be a more focused business that is better-positioned to drive sustainable sector leading growth for years to come.

Due to the timing of the transaction, the divestiture of Birch Benders will have no impact on the company’s FY22 net sales and adjusted EBITDA.

Bank of America said it viewed the divestiture move as prudent given Birch ultimately did not seem core to the portfolio or SOVO’s organic sales prospects, which the firm noted is centered around Rao. The new adjusted EBITDA estimates from BofA on SOVO are $127M for 2023 and $139M for 2024. A Buy rating and price objective of $17 were reiterated.

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