Nestlé’s foodservice unit Davigel may be put up for sale

Nestlé is said to be exploring options to divest its French foodservice unit Davigel as it seeks to trim its portfolio of brands.

The sale, if finalised, could fetch Nestlé around €300m, reported Reuters citing sources with knowledge of the matter.

Food service firms such as Brake Brothers, Booker Group and Sodexho and private investors are likely to show interest in the unit.

Additionally, Bain & Co and Clayton, Dubilier & Rice could be strong contenders as the two firms have previously invested in the foodservice segment, according to one of the sources.

Although Nestlé has not yet appointed a bank officially, it is expected to opt for Credit Suisse as the company has worked closely with the bank in the past.

Davigel was part of the Buitoni frozen food business, which was acquired by Nestlé in 1989.

The unit supplies frozen and chilled meals and ice cream to restaurants and hospitals, and it reported EBITDA of around €35m in 2012.

Earlier this week, Nestlé agreed to sell its premium sports nutrition business under the PowerBar and Musashi brands to US-based consumer packaged goods maker Post Holdings.

Last year, the company said it was looking to divest certain underperforming businesses to improve its overall performance.

In line with this, in November 2013 Nestlé sold certain operations of its Jenny Craig diet business unit to private equity firm North Castle Partners.

In December, the company divested its stake in flavourings and fragrances maker Givaudan, and last month it signed a deal with Brynwood Partners to sell frozen pasta business Joseph’s Pasta.

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Image: Davigel supplies frozen and chilled meals and ice cream to restaurants and hospitals. Photo courtesy of zole4 at FreeDigitalPhotos.net.