Nestlé to Sell U.S. Frozen Pasta Business; Disposal Part of Food Group’s Plans to Pare Down Roster of Brands
January 8, 2014 Leave a comment
Nestlé to Sell U.S. Frozen Pasta Business
Disposal Part of Food Group’s Plans to Pare Down Roster of Brands
RYAN DEZEMBER
Updated Jan. 6, 2014 6:47 a.m. ET
Nestlé SA NESN.VX -0.38% is saying arrivederci to its U.S. frozen ravioli business, part of the Swiss food giant’s plans to pare down its roster of brands. Nestlé has agreed to sell Joseph’s Pasta Co., which supplies restaurants with ravioli, manicotti and tortellini, to Brynwood Partners, a U.S. buyout firm that specializes in acquiring corporate castoffs.Neither party is disclosing terms of the transaction. Brynwood usually makes equity investments of $100 million or less. The Connecticut-based firm said it is tapping its newest $400 million fund to pay for Joseph’s, which is based in Haverhill, Mass.
In October, Nestlé Chief Executive Paul Bulcke said the company had identified underperforming product lines among its about 1,800 business “cells” that it would look to sell.
“The decision to sell Joseph’s Pasta was driven by our increased focus on Nestlé USA’s retail brands,” said Hannah Coan, Nestlé USA’s vice president for corporate and brand affairs.
In October, Nestlé struck a deal to sell its struggling Jenny Craig diet business to U.S. buyout firm North Castle Partners LLC. It has also found buyers in recent months for a Danish ice-cream delivery business, a French bottler of mineral water and its Bit-O-Honey candy line, which Brynwood bought in May.
Bit-O-Honey wasn’t the first business Brynwood bought from Nestlé. The firm acquired the Flipz chocolate pretzels and Turtles chocolate-covered nut clusters in separate deals in 2004 and 2007, respectively. Last month Brynwood sold the company it created to house those brands to the Turkish owner of Godiva chocolates, Yildiz Holding AS, for $221 million. That haul is more than four times as much as Brynwood had invested in the brands, according to a person familiar with the matter.
Joseph’s was born out of a Boston-area bakery that supplied local supermarkets with pasta. Eventually, a member of the family that owned the bakery developed an automated system for the delicate task of making ravioli and other stuffed pastas. Joseph’s, which still makes the fillings by hand in Massachusetts, was scooped up by Nestlé in 2006.
“For a commercial process it’s as close as you can come to handmade stuffed pasta,” said Henk Hartong, senior managing partner at Brynwood.
Brynwood will look to increase sales through wholesale distribution channels and will explore an expansion into grocery-store freezers, perhaps via private-labeling or under the Joseph’s name, Mr. Hartong said.
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