The largest food company in the world – Nestle SA revealed that it plans to expand its skin-care division in North America. The company intends to buy the commercial rights to sell some of the products of Valeant Pharmaceuticals Inc. in a deal that is estimated to 1.4 billion dollars in cash.
This is considered a strategic step that will help the company consolidate the positions of its newly-created dermatology unit, which is called Nestle Skin Health SA. The division was established after the company took full control of the joint venture Galderma, which was initially under the control of both Nestle and LOreal SA.
Nestle SA made an official statement today, sharing that it is to get the commercial rights to five of Valeants aesthetic dermatology products in the U.S. and Canada, which according to the companys announcement both make more than half of the global medical aesthetic products market.
One of the analysts, who work at Canaccord Genuity Corp. – Mr. Eddy Hargreaves commented on the companys statement, which was cited by Bloomberg: “It’s strategically sensible, since Nestle had signaled it is interested in building a dermatology business long-term.”
The deal includes products, which are used for corrective facial aesthetic treatments, such as Emervel, Restylane and Perlane. Other products that are covered by the agreement are Dysport and Sculptra.
After reporting that its main food business is dealing with some difficulties on the road, Nestle SA bets on its skin-care unit, hoping that this would be beneficial for its business. In February 2014, the company made its first steps into the specialized medical skin treatments business after acquiring the full control over Galderma, which will be now be in a separate unit.
Nestle SA was adding 0.36% to trade at 69.80 euros per share by 11:18 GMT, marking a one year change of +6.56%. According to the information published on the Financial Times, the 26 analysts offering 12-month price targets for Nestle SA have a median target of 70.50, with a high estimate of 80.00 and a low estimate of 57.00. The median estimate represents a 1.37% increase from the last price of 69.55.
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