Metal Products Distributor, Herbalife Plan to Go Public

Times Staff Writer

Two of the Southland’s largest privately held companies disclosed plans Friday to go public.

Herbalife International Inc., the Los Angeles marketer of weight-loss and nutritional supplements, said in a regulatory filing that it hoped to raise as much as $345 million in an initial public stock offering. And Earle M. Jorgensen Co., a Lynwood metal products distributor, said it hoped to raise as much as $250 million through the sale of common stock.

Neither company said how many shares it hoped to sell or at what price.

For Herbalife, the IPO would mark the company’s return to the public markets. Herbalife went private in 2002 as part of a deal in which two investment firms, Whitney & Co. and Golden Gate Private Equity Inc., acquired a controlling stake in the company for $685 million.


Herbalife was put up for sale after the death of its charismatic leader, Mark Hughes, who founded the company in 1980 and died in 2000, when he was 44, of an accidental overdose of alcohol and sleeping pills.

The company’s products include dietary supplements, protein bars and skin- and hair-care lines and are sold in 59 countries through a network of more than 1 million independent distributors. Herbalife saw its profit for the six months ended June 30 plunge 65%, to $11.6 million, from the year-earlier period.

Shortly before a government ban, Herbalife in late 2002 stopped selling products containing ephedra, a potent stimulant that was blamed for heart attacks, strokes and dozens of deaths. The company itself was hit with two wrongful-death lawsuits.

The company plans to use the proceeds from the offering to help pay a special dividend to existing shareholders totaling $200 million and to retire two bond issues.

Last year, Herbalife named Michael O. Johnson, then president of Walt Disney International, as its chief executive, citing his experience in expanding global business. Johnson replaced Frank Tirelli, who left Herbalife in 2002.

Morgan Stanley & Co., Merrill Lynch & Co., Banc of America Securities, Citigroup Global Markets and Credit Suisse First Boston were listed as underwriters. The company plans to list the stock on the New York Stock Exchange under the symbol HLF.


Jorgensen, which has been in business for more than 80 years, is one of the largest independent distributors of metal products in the United States, with 36 service and processing centers.

The company was founded by Earle M. Jorgensen, who came to Los Angeles after World War I and started combing shipyards for surplus scrap metal. A big Republican fundraiser and a member of the late President Reagan’s so-called kitchen cabinet, Jorgensen died in 1999, at 101.

Thanks to sharply higher prices and increased productivity, the company’s profit in the year ended March 31 soared to $15.2 million from $2.3 million a year earlier on a 13% increase in sales to $1.04 billion.

Jorgensen said it would use the proceeds from the IPO to buy out the holders of the company’s preferred stock, which is mostly held by management.

Credit Suisse First Boston and Goldman, Sachs & Co. were listed as lead underwriters for the IPO, Securities and Exchange Commission documents showed. The company plans to list its stock on the NYSE under the symbol JOR.


Reuters and Dow Jones were used in compiling this report.