Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Nestlé    NESN   CH0038863350

NESTLÉ

(NESN)
  Report  
Delayed Quote. Delayed Swiss Exchange - 05/24 11:30:53 am
99 CHF   -0.32%
05/25Nestlé Is Halfway to Cost-Savings Goal -- WSJ
DJ
05/24NESTLE STILL COMMITTED TO GLOBAL CONFECTIONERY : Ceo
RE
05/24Nestlé Focuses on Factories, Procurement to Hit Cost-Cutting Goal
DJ
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Nestle : makeover advances with $10 billion sale of skin health unit

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/16/2019 | 09:22am EDT
FILE PHOTO: Logo is pictured during the 152nd Annual General Meeting of Nestle in Lausanne

ZURICH/FRANKFURT (Reuters) - Nestle has entered exclusive talks to sell its skin health business to a consortium led by EQT Partners for 10.2 billion Swiss francs ($10.1 billion), as the food group shifts its portfolio in response to changing consumer demands.

The proposed transaction with private equity firm EQT, a unit of the Abu Dhabi Investment Authority and PSP Investments is expected to close in the second half of 2019 pending regulatory approval, Nestle said on Thursday.

Nestle Chief Executive Mark Schneider put the skin health unit up for sale last September as the group moved to ditch underperforming businesses, following years of slowing growth as many consumers favored fresh foods over packaged goods.

Nestle was also under fire from activist investor Daniel Loeb's Third Point, which asked for a faster overhaul in July. The U.S. hedge fund has since generated very good returns on its Nestle stake, leading Loeb to praise Schneider's performance this year.

Nestle shares were up 0.8 percent at 1315 GMT, after hitting an all-time high earlier in the session following the announcement of the deal, which according to Refinitiv data is the second largest European private equity buyout since the financial crisis after Carlyle's acquisition of an Akzo Nobel unit last year.

Analysts said the price tag was attractive for Nestle at an enterprise value-to-sales multiple of 3.6 times, or a multiple of roughly 20 times expected core earnings.

The unit, which will be rebranded Galderma, is expected to post earnings before interest, tax, depreciation and amortization of roughly 550 million Swiss francs this year and of more than 600 million next year, a person close to the matter said.

"EQT focuses on quality businesses. We have a lot of good ideas how to develop Nestle Skin Health into a pearl and then make our return," EQT partner and co-head of private equity Marcus Brennecke told Reuters.

"We will strengthen Galderma's board with relevant industrial expertise to develop each of the three business units to their full potential. A couple of prescription drugs are theoretical blockbusters with large business opportunities," he said.

RETURN TO HEALTH

ZKB analyst Patrik Schwendimann estimated the transaction would generate an extraordinary gain before taxes of around 4 billion francs for Nestle based on the net book value of 6.2 billion francs Nestle gave the unit in its 2018 financial statements.

Nestle will provide an update on how it will use the proceeds and its future capital structure after the deal closes.

Schwendimann said Nestle was under no pressure to announce a new share buyback given that the current one runs until the end of the year.

Nestle Skin Health (NSH), which sells Cetaphil and Proactiv skin care products, Restylane wrinkle fillers and prescription dermatology medicines, had sales of 2.8 billion Swiss francs last year.

Nestle created the unit, which will remain headquartered in Switzerland, in 2014 when it bought L'Oreal's stake in their Galderma joint venture.

Under former Chief Executive Paul Bulcke, skin treatments were part of Nestle's push into higher-growth health products to counter a slowdown in its traditional food business, but performed poorly, leading to one-off costs and restructuring.

A reorganization over the last two and half years returned it to double-digit sales growth in the first quarter of 2019.

Schneider said in February that NSH was now "a leader in its space" with a competitive cost structure, and that suitors were lining up to acquire it.

"(This) looks like a very good piece of business for Nestle. Most probably assumed a price tag would be around 7 billion Swiss francs at the start of the process," said Jon Cox, analyst at Kepler Cheuvreux.

Vontobel's Jean-Philippe Bertschy said the disposal was the logical consequence of the sharper capital allocation introduced by Schneider.

EQT and ADIA, which are financing the deal through a roughly 50:50 split of equity and debt, had faced competition from rival buyout funds and industry players including a consortium of Advent and Cinven, as well as U.S. private equity firm KKR and European fund PAI Partners, sources had said.

Advisory firm Evercore and Credit Suisse advised Nestle on the deal, while EQT was advised by Rothschild, PWC and Kirkland & Ellis.

(Reporting by Silke Koltrowitz, Arno Schuetze, Michael Shields and Pamela Barbaglia; Editing by Brenna Hughes Neghaiwi and Jan Harvey)

By Silke Koltrowitz and Arno Schuetze

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on NESTLÉ
05/25Nestlé Is Halfway to Cost-Savings Goal -- WSJ
DJ
05/24NESTLE : still committed to global confectionery - Chief Executive
AQ
05/24NESTLE : still committed to global confectionery - Chief Executive
AQ
05/24NESTLE STILL COMMITTED TO GLOBAL CON : Ceo
RE
05/24Nestlé Focuses on Factories, Procurement to Hit Cost-Cutting Goal
DJ
05/24NESTLE : CEO says company still committed to global confectionery
AQ
05/24NESTLE : still committed to global confectionery - CEO
RE
05/23Coronation Research Nigerian Consumer Report 2019
AQ
05/23GLOBAL MARKETS LIVE : Amazon, LVMH, Sprint, T-Mobile…
05/222019 Nigerian Consumer Report
AQ
More news
Financials (CHF)
Sales 2019 95 422 M
EBIT 2019 16 380 M
Net income 2019 11 337 M
Debt 2019 33 027 M
Yield 2019 2,65%
P/E ratio 2019 25,30
P/E ratio 2020 22,57
EV / Sales 2019 3,52x
EV / Sales 2020 3,38x
Capitalization 303 B
Chart NESTLÉ
Duration : Period :
Nestlé Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends NESTLÉ
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 101  CHF
Spread / Average Target 2,1%
EPS Revisions
Managers
NameTitle
Ulf Mark Schneider Chief Executive Officer & Director
jeff hamilton President
Paul Bulcke Chairman
Magdi Batato Executive Vice President-Operations
François-Xavier Michel Marie Roger Chief Financial Officer & Executive Vice President
Sector and Competitors
1st jan.Capitalization (M$)
NESTLÉ24.06%302 570
MONDELEZ INTERNATIONAL30.23%75 090
DANONE16.73%55 181
THE KRAFT HEINZ COMPANY-27.72%37 937
GENERAL MILLS35.62%31 622
THE HERSHEY COMPANY21.47%27 184