Nestle buys weight-loss firm Jenny Craig

LONDON (MarketWatch) -- Leading chocolate maker Nestle SA announced plans on Monday to help customers shed their unwanted pounds by agreeing to buy weight-loss company Jenny Craig for $600 million.

Nestle (NSRGY) (CH:NESN) , whose products include Crunch and KitKat chocolate bars, said the deal demonstrates its "continuing commitment to nutrition, health and wellness."

Shares in Nestle climbed 0.4% in a broadly higher Swiss market.

Jenny Craig provides personalized weight-loss programs through its 600 centers in the U.S., Canada and Australia. The company also has a range of branded prepackaged meals.

Nestle already owns the Lean Cuisine brand and recently bought Uncle Toby's cereals and nutritional snacks business in Australia. But the deal marks the first time the company has moved into a market that is not mainly focused on selling food.

"With this strategic acquisition, the group takes another important step in its transformation process into a nutrition, health and wellness company that sees weight management as a key competence," said Peter Brabeck-Letmathe, chairman and CEO of Nestle.

"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 U.S. but also the world over," said Brabeck-Letmathe. "The Jenny Craig acquisition puts us in a privileged position to help many of our consumers."

Nestle, which is buying Jenny Craig from a private-equity consortium that includes ACI Capital and MidOcean Partners, said the deal will not dilute group earnings.

Jenny Craig, which achieved sales in excess of $400 million in the last year on the back of double-digit organic growth, will retain its current management team, who will report directly to Nestle's nutrition unit.

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