Nestle mulls selling Davigel frozen foods business

Nestle SA is weighing plans of selling its frozen foods business Davigel SAS, which may fetch the Swiss food giant around €300 million ($400 million), Reuters yesterday reported, citing three sources familiar with the matter.

Nestle mulls selling Davigel frozen foods businessPotential buyers could include food service providers such as Brake Brothers, Booker Group and Sodexho as well as private equity firms Bain & Co and Clayton, Dubilier & Rice, the report said.

The report comes just a day after Nestle agreed to sell its PowerBar and Musashi brands to US-based Post Holdings (See: Nestle to sell sports nutrition PowerBar and Musashi brands to Post Holding)

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 food solutions, and supplies meals to a number of hospitals and healthcare institutions.

Davigel offers nearly 3,000 products, supplies more than 990 million meals to patients every year and has annual turnover of €783 million .

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

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.

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 (See: GSK in talks to sell Lucozade, Ribena soft drinks to Suntory),  while  Anglo-Dutch consumer goods giant Unilever sold its Wish-Bone salad dressings business to US-based Pinnacle Foods for $580 million (Pinnacle Foods to buy Unilever's Wish-Bone salad dressing business for $580 mn), and Campbell Soup sold some of its European soups, sauces and simple meals brands to private equity firm CVC Capital Partner for an undisclosed sum (Campbell Soup to partially divest European brands to CVC Capital).