Sovos stock falls on news of discounted secondary offering
LOUISVILLE — Sovos Brands Inc.’s (Nasdaq: SOVO) stock, which has been riding high all year, fell slightly on Tuesday after the food-brands umbrella company announced plans late Monday for a secondary public offering that would discount the price by more than 6% relative to Monday’s closing price.
Existing Sovos stockholders will sell 10 million shares at $17.50 per share, raising $175 million. Sovos will not receive proceeds from the sale, according to a U.S. Securities and Exchange Commission disclosure.
Goldman Sachs & Co. LLC and J.P. Morgan will serve as underwriters of the secondary public offering.
The Louisville company, which moved to Colorado from California several years ago and controls Rao’s pasta sauce, Noosa Yoghurt and Michael Angelo’s frozen entrées, was valued at more than $1 billion when it launched its initial public offering in 2021.
The stock price at the time of the IPO was $12. Sovos finished trading Tuesday at $17.50, the price of the secondary public offering, down 6.07% on the day.
Still, Sovos’ stock price has been cruising in 2023, up 27.27% year-to-date.
Sales of Rao’s pasta sauce “exceeded expectations” in the first quarter, resulting in higher year-over-year earnings and the raising of the company’s full-year revenue expectations, according to Sovos’ quarterly report, released last week.