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Heinz slims diet business
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July 22, 1999: 11:02 a.m. ET
Food processor secures sale of Weight Watchers with $735M LBO
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NEW YORK (CNNfn) - Heinz Corp. agreed Thursday to sell the bulk of its Weight Watchers diet products business to a group of private investors and management in a $735 million leveraged buyout.
The Pittsburgh-based food processor is selling Weight Watchers to Artal Luxembourg, a European firm. The unit's management will also be invited to participate in the deal, and Heinz will retain a 6 percent stake in the unit valued at $14 million.
In a leveraged buyout, investors borrow to buy a company and try to repay the debts with funds from the business' operations or asset sales.
Heinz will retain some Weight Watchers brands, including frozen meals and desserts, its U.K. Weight Watchers operation, and other food items which fit into the core products strategy.
The Pittsburgh-based food processor announced plans in February to sell the business as part of a company-wide restructuring that will see it focus on six core brand areas and six countries, and cut up to 4,000 jobs.
The company took a $411 million second quarter charge to fund the restructuring, and beat Wall Street expectations with 60 cents a share in earnings for the quarter.
Heinz (HNZ) shares slipped 1/16 to 49-13/16 in morning trading Thursday. 
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