Nestlé SA in talks to sell Davigel frozen food unit to Brakes Group

Nestlé SA yesterday said that it is in talks to sell its Davigel frozen food unit to the Brakes Group, a company owned by buyout firm Bain Capital.

Nestlé SA yesterday said that Davigel was the subject of further discussions, including with representatives of the operation's workers and a transaction will require the approval of regulators.

Nestlé did not disclose any financial details, but analysts estimate that Davigel could fetch up to €300 million. The unit generated revenue of about €783 million or 0.3 per cent of Nestlé's 2014 annual sales of SFr 91.6 billion.

Davigel was founded in 1963 and was part of the Buitoni frozen food business until Nestle acquired it in 1989.

Davigel is Europe's leading provider of frozen and chilled foods, and supplies meals to a number of hospitals and healthcare institutions.

It offers nearly 3,000 products, and supplies more than 990 million meals to patients every year.

The company is based in France, employs more than 3,000 people, operates three factories and is present in 10 countries in Europe.

The Brakes Group is a leading supplier to the food service sector in the UK, Ireland, France and Sweden.

Nestle had said last August that it would take a good look at its non-performing brands after having posted its weakest quarterly results in four years.

It then sold its Jenny Craig weight-management businesses in North America and Oceania to private equity firm North Castle Partners, and its US frozen pasta business to Brynwood Partners.

Earlier this year, the Nestlé Prepared Foods unit in the US sold Joseph's Pasta Company to Brynwood Partners.

Last November Nestlé sold its Jenny Craig weight management business in North America and Oceania to North Castle Partners, a USA-based private equity group. The Jenny Craig business in France was not part of the transaction.

Other companies have recently reassessed their portfolio of non-performing assets and have been divesting some brands in developed regions.

British pharmaceutical giant GlaxoSmithKline last year sold its Lucozade and Ribena nutrition drinks to Japan's Suntory Beverage & Food for $2.11 billion, while Anglo-Dutch consumer goods giant Unilever sold its Wish-Bone salad dressings business to US-based Pinnacle Foods for $580 million, and Campbell Soup sold some of its European soups, sauces and simple meals brands to private equity firm CVC Capital Partner for an undisclosed.