Nestlé expands health business with purchase of Jenny Craig

SWITZERLAND’S Nestlé has bought US weight-loss company Jenny Craig for around €477 million, expanding its high-margin nutrition and health business.

Jenny Craig, which according to Nestlé had sales of over $400 million (€318m) in the last 12 months, was founded in 1983 by weight-loss guru Jenny Craig, offering dieters prepared meals and exercise programmes.

Nestlé, the world’s largest food company, bought the California-based company from a private equity group including ACI Capital and MidOcean Partners, it said, adding the deal would not dilute group earnings. “This acquisition will ... reinforce Nestlé Nutrition’s presence in the USA, the world’s largest nutrition and weight management market.”

Jenny Craig offers its products in the US, Canada, Australia and New Zealand.

The acquisition follows on the heels of Nestlé’s purchase of Australia’s Uncle Toby’s snacks, breakfast and soups business, making Nestlé the number one in Australia’s nutritious snacks market and the number two in instant soups.

Nestlé is increasingly focussing on higher-margin products such as those with nutritional and health benefits. It is expanding in markets, such as the US, where consumers are willing to buy premium products.

“The price is appropriate,” said Vontobel analyst Claudia Lenz, who has an “outperform” rating on Nestlé stock.