VEVEY, Switzerland – In a new twist in corporate synergy, Nestle AG, the world's biggest food and drink company, said Monday it will fatten up its weight-loss business by buying Jenny Craig Inc. for $600 million.
The current management team of Jenny Craig, which is based in Carlsbad, Calif., will continue to run the business and report directly to Nestle, the Swiss company said in a statement.
Nestle is buying Jenny Craig — which employs more than 3,000 people — from two private equity groups, ACI Capital and MidOcean Partners. The transaction is expected to close in the third quarter, the private equity firms said in a statement.
Weight management will become a new business within Nestle's nutrition unit and will reinforce its U.S. presence. The Swiss company already owns the Lean Cuisine line of foods.
"With this strategic acquisition, the group takes another important step in its transformation process into a nutrition, health and wellness company," said Nestle Chairman and Chief Executive Peter Brabeck-Letmathe.
"The rise of obesity and the resulting metabolic disorders, such as diabetes and cardiovascular disease, is a major public health concern, not only in the USA but also the world over," Brabeck-Letmathe said.
Jenny Craig, which has more than 600 weight-loss centers in the U.S., Canada, Australia and New Zealand, generated sales of more than $400 million in the past 12 months and achieved double-digit internal growth.
Nestle shares gained 1 percent to 369.75 Swiss francs ($300.38) in Zurich trading.