THOMPSON MED SHEDDING SLIM-FAST: SPIN OFF

Executive Summary

THOMPSON MED SHEDDING SLIM-FAST: SPIN OFF creates diet aid business as a separate entity from Thompson's OTC and H&BA businesses. Slim-Fast Foods is based in New York City and will have a separate executive group, staff and sales force from the parent firm. Thompson Medical founder S. Daniel Abraham will serve as chairman of both firms. He took 43-year-old Thompson Med private in a late 1988 buy-out that valued the company as then configured at about $150 mil. The company's sales grew "substantially" in 1989, Abraham said. Thompson Med's sales in 1988 were $168 mil., including Slim-Fast revenues. Abraham said Slim-Fast sales "skyrocketed" last year. Thompson Medical's products include Aspercreme and Sportscreme Pain Relief Rubs, Dexatrim Appetite Suppressants, Tempo Antacid, Cortizone-5 creme and ointment, Aqua-Ban premenstrual product and Caffedrine stimulant. These brands will continue to be managed independently under the direction of Thompson Med Exec VP and Chief Operating Officer Frank DiPrima. Heading up the new Slim-Fast Foods operations is ex-Campbell Soup exec Daniel Santangelo, who will serve as chief operating officer. He was formerly VP/Group General Manager of the Soup Unit at Campbell foods. Commenting on the decision to split the company in two, Abraham said "the unprecedented growth" in Slim-Fast sales "led us to rethink our organizational set-up" in terms of specialization. The new structure "will allow each company to effectively pursue its individual trade, advertising, marketing and business development philosophies," and to better support retail customers, Abraham remarked. By making the diet-food business autonomous, Thompson Medical is also insulating its core business from future problems which could arise from the boom-bust cycle that often characterizes the diet product market.