WeightWatchers 2007 Annual Report Download - page 22

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History
Early Development
In 1961, Jean Nidetch, the founder of our company, attended a New York City obesity clinic and took what
she learned from her personal experience at the obesity clinic and began weight-loss meetings with a group of her
overweight friends in the basement of a New York apartment building. Under Ms. Nidetch’s leadership, the
group members supported each other in their weight-loss efforts, and word of the group’s success quickly spread.
Ms. Nidetch and Al and Felice Lippert, who all successfully lost weight through these efforts, formally launched
our business in 1963. Weight Watchers International, Inc. was incorporated as a Virginia corporation in 1974 and
succeeded to the business started in New York in 1963. Heinz acquired us in 1978.
Artal Ownership
In September 1999, Artal Luxembourg, S.A., Artal Luxembourg, an indirect subsidiary of Artal Group,
S.A., together with its parent and its subsidiaries, Artal, acquired us from Heinz. Subsequent to Artal’s
acquisition of us, Artal Luxembourg transferred ownership of its shares in us to Artal Participations and
Management S.A. and Artal Holdings Sp. z o.o., each also members of Artal. Currently, Artal Holdings Sp. z o.o.
is the only record holder of our shares by Artal.
WeightWatchers.com Acquisition
On June 13, 2005, we entered into an agreement to acquire control of our licensee and affiliate,
WeightWatchers.com. On July 1 and 2, 2005, we increased our ownership interest in WeightWatchers.com from
approximately 20% to approximately 53% by (i) exercising warrants to purchase WeightWatchers.com common
stock for a total purchase price of approximately $45.7 million, (ii) acquiring shares of WeightWatchers.com
common stock owned by the employees of WeightWatchers.com and other parties not related to Artal through a
merger of a subsidiary of ours with WeightWatchers.com for a total purchase price of approximately
$28.4 million and (iii) acquiring additional shares of WeightWatchers.com common stock, representing
outstanding stock options then held by WeightWatchers.com employees, for a total purchase price of
approximately $62.3 million.
On June 13, 2005, WeightWatchers.com also entered into a redemption agreement with Artal to purchase all
of the shares of WeightWatchers.com owned by Artal at the same price per share as we paid in the merger.
Subsequently, on December 16, 2005, WeightWatchers.com redeemed all of its outstanding common stock held
by Artal for a total price of approximately $304.8 million as provided in the redemption agreement.
WeightWatchers.com used cash on hand and the proceeds of the WW.com Credit Facilities (as defined below in
“Item 6. Selected Financial Data—Items Affecting Comparability—Debt Refinancing”) in the aggregate amount
of $215.0 million to finance this redemption, as well as pay related fees and expenses. As a result of this
redemption, we now own 100% of WeightWatchers.com.
The transactions above relating to WeightWatchers.com were evaluated, negotiated and recommended by a
Special Committee of Weight Watchers International’s Board of Directors consisting of its independent directors.
Tender Offer and Share Repurchase
On December 18, 2006, we commenced a tender offer in which we sought to acquire up to 8.3 million
shares of our common stock at a price between $47.00 and $54.00 per share, a transaction that we refer to as the
Tender Offer. Prior to the Tender Offer, we entered into an agreement with Artal whereby Artal agreed to sell to
us at the same price as was determined in the Tender Offer, the number of its shares necessary to keep its
percentage ownership in us at substantially the same level after the Tender Offer. Artal also agreed not to
participate in the Tender Offer so that it would not affect the determination of the price in the Tender Offer.
The Tender Offer expired at midnight on January 18, 2007, and on January 26, 2007 approximately 8.5 million
shares were repurchased at a price of $54.00 per share. The 8.5 million shares repurchased were comprised of the
8.3 million shares that we offered to purchase and 0.2 million shares purchased pursuant to our right to purchase up
to an additional 2% of the outstanding shares as of November 30, 2006. On February 2, 2007, we repurchased
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