Bain-backed Brakes in exclusive talks to acquire Nestlé's Davigel

José Rojo
16 April 2015

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Bain Capital Europe’s portfolio company Brakes Brothers has entered exclusive talks to acquire Nestlé’s frozen food unit Davigel.

In a press release made public on 15 April, Nestlé confirmed "strategic options" were being considered for Davigel.

The talks to divest its subsidiary to Brakes Group take place as the Swiss food multinational is looking to re-examine its portfolio of companies. Last January, the company sold Spain-based La Cocinera to Lion Capital's Findus.

Headquartered in Martin-Église, France, Davigel is a frozen and chilled meals supplier purchased by Nestlé in 1988 alongside the rest of Buitoni's frozen food business. Employing 3,100 people, Davigel reported €700m in gross turnover in 2013.

Financial details of the transaction have yet to be revealed, but French publication Les Echos reports a €200-300m price tag for Davigel. According to the same source, Crédit Suisse has confirmed it has been appointed by Nestlé to take charge of the sale.

Should it go forward, this would be the seventh purchase by Brakes Group since it was bought by Bain Capital Europe in 2007. The following year saw the London-headquartered business acquire Irish distributor O'Kane, British catering service provider Woodward Foodservice and French food service wholesaler Rault.

Two years later, Brakes went ahead with three additional purchases as it picked up Leeds-based chilled foodservice provider Freshfayre, Swedish wholesaler Menigo Foodservice and Browns Foodservice.

Bain acquired Brakes Group from London-based Clayton, Dubilier & Rice (CD&R) in 2007. The secondary buyout was valued at £1.3bn and came one year after CD&R recouped its initial £270m investment in Brakes via a dividend recapitalisation, according to unquote" data.

Brakes Group was founded in 1958 and employs 10,000 people across 80 locations in the UK, Ireland, France and Sweden. It most recently reported £2.6bn in annual turnover.

In 2014, the London-based food service distributor issued £260m worth of 7.125% senior secured notes and €150m in senior secured Euribor+ notes, both maturing in 2018. This move was a part of Brakes' plans to refinance existing senior debt maturing in 2016.