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The Shrewd Investor Behind Weight Watchers

According to a Forbes magazine article, Raymond Debbane is the man behind Weight Watchers Intl. which is the private equity deal of the century. This money-making relationship has been going on since 1999, largely unnoticed.

Mr. Debbane runs Invus Group, an investment firm headquartered in NYC that manages money for a few wealthy European families. 13 ago, Debbane had an insight about the obesity epidemic in America, figuring that people would form a life-long relationship with a top-branded weight-loss company. When H.J. Heinz put its Weight Watchers unit on the block in 1999,

Debbane got the fund Invus managed, Artal Group, to buy Weight Watchers in a $735 million leveraged buyout. Artal put down $224 million in the deal and the company financed the rest of the acquisition with debt, SEC filings show. SEC filings also show that since then Artal has pocketed $3.8 billion by selling stock, unloading its ownership in WeigthWatchers.com, and collecting dividends. In addition, Artal still retains a 52% stake in Weight Watchers, worth about $1.4 billion.

Put in other words, the $224 million Debbane invested in Weight Watchers in 1999 is now worth some $5.2 billion; most of it realized.

When Debbane bought Weight Watchers in 1999, the company had annual revenues of $365 million and profits of $47 million. In 2011, Weight Watchers had its best year ever– earning $305 million on revenues of $1.8 billion. The stock soared to over $80 and in February the company completed a tender offer in which it repurchased shares for $780 million from Artal using mostly borrowed funds. The stock has recently traded around $47, on lower earnings expectations for the rest of the year.

Debbane’s roots are in Lebanon. He graduated from the American University of Beirut before getting his MBA at Stanford and is associated with several organizations involved in Lebanon. But according to SEC filings, Debbane, 57, is a citizen of Panama. Prior to founding Invus in 1985, he worked in Paris for the Boston Consulting Group.

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