Investopedia: Will Nestle Succeed Where Others Have Failed?

A curious announcement came out this week when Swiss food and nutrition giant Nestle (OTC:NSRGY) announced that it was acquiring U.S.-based medical therapeutics and diagnostics company Prometheus Laboratories. Nestle will fold Prometheus into its newly formed Nestle Health Science division and likely will guide the company's efforts toward more research into nutrition-based therapeutics as well as areas like metabolism. Although Prometheus' $250 million or so in ongoing annual revenue will not make a major dent in Nestle, it is an interesting deal on multiple levels. (For background reading, see Investing In The Healthcare Sector.)

What Nestle Is Getting 

In acquiring Prometheus, Nestle is getting a business that has focused on diagnostics and therapeutics for indications in gastroenterology and oncology. Prometheus recently got approval to sell a Crohn's diagnostic test, and the company sells a variety of drugs for conditions like cancer and irritable bowel disease.

Nestle did not specify the price it is paying for Prometheus. Considering others deals like Novartis' (NYSE:NVS) acquisition of Genoptix, Quest's (NYSE:DGX) acquisition of Celera, and Thermo Fisher's (NYSE:TMO) acquisition of Phadia, Nestle likely paid at least $650 million, but that is purely speculation at this point.

To read the full piece, please click the link below:
http://stocks.investopedia.com/stock-analysis/2011/Will-Nestle-Succeed-Where-Others-Have-Failed-NSRGY-NVS-TMO-DD-PG-ABT-GNC0526.aspx?partner=YahooSA