Nestlé sells Jenny Craig weight management business in North America and Oceania to PE firm
The Jenny Craig business in France is not part of the transaction.
The new owners will take over the businesses and offer employment to Jenny Craig staff in North America and Oceania, said the firm, which acquired Jenny Craig in 2006 from two private equity firms for $600m.
The move came as little surprise to analysts, as Nestlé has been clear about its intentions to divest underperforming brands and businesses in recent weeks, with CEO Paul Bulcke recently telling investors Nestle had drawn up lists of businesses that could be fixed and those that could not.
Several businesses had been "sailing under the radar screen for too long without being part of the party”, he added at an investor presentation on October 1.
Professor: North Castle will likely create more value from Jenny Craig than Nestlé ever could
Commenting on the deal this morning, professor Samina Karim, at Boston University School of Management said: “I was always skeptical about Neslé’s acquisition of Jenny Craig. Though Nestlé makes nutritional and weight loss foods, running a brick-and-mortar consumer business poses different challenges.
“This divestiture makes sense for all parties involved. North Castle understands both the wellness industry and how to manage fitness/gym businesses. It will likely create more value from Jenny Craig than Nestlé ever could.”
North Castle’s portfolio includes Curves, Red Door Spa and several other fitness and lifestyle companies, while Jenny Craig sells portion-controlled, prepackaged food and tailors weight-loss programs for consumers, offering telephone and in-store consultations for a fee.
Once the deal is completed, North Castle will combine Jenny Craig with Curves, which it acquired in August 2012.
