Brakes Group’s Purchase of Davigel from Nestlé Imminent?

The Ashford, Kent, UK-based Brakes Group, a leading foodservice supplier in the UK, Ireland, France and Sweden, reports that it is engaged in exclusive discussions to acquire the Davigel SAS unit from Vevey, Switzerland-headquartered Nestlé. As Nestlé has confirmed the talks, a deal is thought to be close to consummation.

The acquisition would increase Brakes’ presence in France, while paving the way for smooth entry into Belgium and Spain. Furthermore, it would secure Davigel’s food manufacturing capabilities and provide the group with exclusive rights to distribute Nestlé branded ice cream to the out-of-home market in France.

140204 DavigelFactoryThe Davigel food processing factory in Noyal-Pontivy, one three operated by the Nestlé in France, would become a Brakes Group operation following an acquisition.

Davigel, based in Dieppe, France, employs more than 3,000 people at three factories that produce fish dishes, value-added vegetables, meat- and poultry-based ready meals, sauces and pastry products. Its extensive product line, much of it developed by in-house chefs, is in the range of 1,500 items.

Nestle-Professional logoAcquired by Nestlé in 1989 from Buitoni, the Nestlé Professional unit is a major supplier of frozen and chilled meal products to restaurants as well as hospitals and healthcare institutions in France and over 10 other countries in Europe and beyond. Approximately 990 million meals are produced and served to patients annually. Last year the company generated turnover of approximately EUR 750 million.

“This acquisition would be an excellent fit with the Brakes Group. We have long admired the Davigel business, its food manufacturing capabilities and Nestlé branded ice cream distribution,” said Ken McMeikan, chief executive officer. “This would be another important step to continuing strong growth and build on our position as a leading European foodservice provider.”

Consummation of the transaction, which is subject to consultations with relevant work councils and approval of from competition authorities, would create the second largest foodservice company in France. While financial details have not been disclosed, it has been speculated that the deal could be worth between EUR 200 and 300 million.

Brakes logo-1Brakes, which has been owned by the private equity group Bain Capital since 2007, began as a poultry supplier to caterers in Kent and London in 1958. In 1963 the company entered the frozen food distribution business in earnest, and six years later it began manufacturing frozen ready meals. Today the Brakes Group employs over 10,000 people at approximately 80 locations, and generates turnover exceeding £2.6 billion per annum.