LONDON (Reuters) - Nestle NESN.VX is exploring a possible sale of frozen foods business Davigel for about 300 million euros ($400 million), three sources familiar with the matter told Reuters on Monday, as part of a drive to trim its sprawling portfolio.
The world’s largest food company, which said on Monday it sold its PowerBar business, is close to appointing a bank to advise on the possible sale, the sources said.
Nestle declined to comment.
Potential buyers were likely to include food service providers such as Brake Brothers, Booker Group and Sodexho (EXHO.PA) as well as private equity firms, the sources said. Bain & Co and Clayton, Dubilier & Rice are obvious choices, one said, since both have invested in food service in the past.
Davigel’s 2012 earnings before interest, taxes, depreciation and amortization were between 30 million and 35 million euros and the business could sell for a mid- to high-single-digit multiple of that, two bankers said.
Davigel - which supplies frozen and chilled meals and ice cream to restaurants and hospitals - was part of the Buitoni frozen food business Nestle bought in 1989.
Nestle has not yet officially mandated a bank to sell Davigel but has worked closely with Credit Suisse CSGN.VX in the past and is expected to appoint that bank for this deal.
Credit Suisse declined to comment.
Nestle - whose wide range of products includes Gerber baby food and Perrier bottled water - said in October it would divest underperforming businesses.
It announced the sale of PowerBar and Musashi to Post Holdings (POST.N) on Monday, the sale of its U.S. frozen pasta business to Brynwood Partners in January and the bulk of its Jennie Craig business in November.
Nestle sold a 10 percent stake in fragrance and flavor maker Givaudan GIVN.VX in December.
Additional reporting Martinne Geller in London and Silke Koltrowitz in Zurich; Editing by Louise Ireland