Nestle reviewing possible sale of frozen food unit Davigel

• Deal could fetch $400 mln

• Nestle close to hiring advisor

• Bain, CDR seen as candidates

The world’s largest food company, which said Feb 3 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, 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 EBITDA was 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 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 in February, 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 in December.

Sophie Sassard and Anjuli Davies are reporters for Reuters News in London