Making mmm-mmm good on its promise in August to rid itself of chocolate maker Godiva, Campbell Soup (NYSE: CPB ) just announced it sold the lady to a Turkish chocolate company for $850 million. That was within the $750 million to $1 billion range analysts had estimated the confectioner would fetch.
It's a sweet deal for the soup maker. Godiva had annual sales of about $500 million out of Campbell's $7.8 billion, which values the chocolatier at 1.7 times revenue, about what Hershey (NYSE: HSY ) currently sports, but about half as much as what Rocky Mountain Chocolate Factory (Nasdaq: RMCF ) gets. Campbell's pegs the valuation at about 15 times EBITDA.
The Turkish buyer, Yildiz Holdings, owns that country's largest consumer goods company, Ulker, which sells biscuits, chocolate, dairy, and beverages, and itself had sales of $7.43 billion in 2006, according to Campbell.
President and CEO Douglas Conant says selling Godiva allows the soup company to hone its focus of "simple meals, anchored by soup, baked snacks, and vegetable-based beverages." That's been the line the health-conscious Campbell's has been spouting for a while now; it also announced that it's supporting the American Heart Association's "Go Red for Women" campaign to promote the fight against heart disease.
V-8 vegetable juice, Pepperidge Farms whole grains breads, and low-sodium soups are becoming more of a mainstay of sales, perhaps as a way to differentiate itself from the competition. Although it has paired up with Coca-Cola (NYSE: KO ) to create some new flavors for its V-8 brand, a healthy drink will set it off from the carbonated varieties of Coke and Pepsi (NYSE: PEP ) .
Yet selling Godiva causes Campbell to miss out on the growing popularity of premium chocolate, a trend it helped establish when it acquired Godiva in 1967. There is also a movement toward "healthy" chocolate (it's been established that dark chocolate helps lower high blood pressure, for example), and manufacturers like Hershey and Nestle are adding fruits like pomegranate and currants, along with more exotic ones like acai and goji, all of which are high in antioxidants.
However, with Campbell able to focus its resources on its core strategy now, it's a good bet it won't be feeling naked without Godiva in its portfolio.
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