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Nestle Acquires Prometheus Labs

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Nestle SA, the world’s largest food company has agreed to acquire Prometheus Laboratories Inc., the manufacturer of treatments for gastrointestinal illnesses and cancer.
Nestle has not mentioned the amount that it will pay to purchase Prometheus Laboratories Inc. However, analysts believe that Nestle might have paid in excess of $550 million for the San Diego, California based company. Spokesperson for Nestle, Hilary Green refused to mention the price being paid by Nestle for Prometheus.

Prometheus Laboratories Inc. is projected to cross sales of $250 million in the upcoming year after selling products that include tests for cancers and Crohn’s disease. The company was founded in 1995 and is named after the Greek god who gave humans the Fire. It is owned by investors which include, Apax Partners, DLJ Merchant Banking Partners.
Prometheus will join the Health Science Unit of Nestle, which handles production of Nutrition products. The nutritional products unit was created in January this year to penetrate the fast growing market of nutritional products. Nestle aims to become the largest nutritional products manufacturer in the next 10 years. The acquisition of Prometheus Laboratories Inc. is the third one since the nutritional unit was started.
Nestle’s acquisition of Prometheus Laboratories Inc. proves that the Swiss giant is serious about the fast growing nutritional market which is set to grow. Companies such as Coca-Cola (NYSE:KO) and Pepsi (NYSE:PEP) are investing in nutritional products to expand into this market. However, the growth from nutritional products will not be visible in the company’s stocks for the next few years. With the overall margins in the Pharmaceutical industry being higher than the one from food products, it will be easier for Nestle to turn a profit from its acquisition of Prometheus Laboratories Inc.
The Nestle Health Science unit will include research and development in areas such as brain health, metabolic conditions for better nutritional drinks and some diseases that the company finds profitable. The acquisition of Prometheus Laboratories Inc. will be completed by the end of the third quarter and more than 500 of its employees will be transferred to Nestle Health Science after the completion of the acquisition. The Chief Executive Officer of Nestle’s Health Science unit said in a statement that the purchase of Prometheus Laboratories Inc. will let Nestle focus on personalized health care products in diagnostics, nutrition and Pharma.
Promesteus along with producing and marketing its own products also sells products from companies such as AstraZeneca Plc (NYSE:AZN) and Novartis AG (NYSE:NVS).

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Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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