Ariana Research
Long/short equity, deep value, special situations

Weight Watchers: Investing In A Public LBO

Executive Summary

Weight Watchers International, Inc. (NYSE:WTW) ("Weight Watchers", "WTW" or the "Company") is a leading provider of weight management products and services with 43% of the United States market (including online and in-meeting). The Company has a market cap of ~$2B and an enterprise value of $4.4B. In 2012, the Company derived 72% of revenues from its In-Person meeting segment, and 28% from WeightWatchers.com. Geographically, the Company generates ~70% of its revenues from the United States and the remainder from overseas.

Mr. Market is currently offering a high quality clinically proven franchise, with a leading market share at 5.5x/5.1x 5 yr. average/TTM pretax earnings and 7.7x FY2012 FCFE. Importantly, the undemanding multiples are associated with a business

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