USANA Plans Makeover

SALT LAKE CITY--USANA Health Sciences Inc. (NASDAQ:USNA) is planning to sell its operations to its founder and president, Myron Wentz, as well as change its name to Innova Ventures Inc. USANA reported that Wentz will surrender his 49.5-percent ownership in USANA's shares to Innova for $1.60 per share (or $7.7 million), a $5 million promissory note and other assets in exchange for the rights to USANA's operations. Following the surrender of stock to Innova, which is subject to shareholder approval in May, USANA Health Sciences will change its name to Innova Ventures Inc, a venture company that will specialize in acquisitions in the nutrition industry. Later this week, USANA will file a proxy statement with the Securities Exchange Commission (SEC) to seek shareholder permission, and a shareholder meeting will be held on or about May 10 to vote on the plan.

This transaction will essentially make 49.5 percent of USANA a privately owned business, since 50.5 percent of the company's stock is still publicly held. USANA will continue to do the same thing--market skin care and nutritional products through network marketing by distributors throughout the United States, Canada, Australia, New Zealand, Hong Kong and Japan.

During the planned transaction, the USANA name will be transferred to Gull Sub, which is a temporary name for what will become USANA Health Sciences. Gull Sub is also a subsidiary of Gull Holdings, owned by Wentz.

According to a company press release, over the last 18 months USANA has been unable to find an acceptable strategic partner with whom to merge or that it might acquire. However, "the unique relationship of Wentz as the founder of the company and as the principle visionary behind its science" makes the Gull Sub plan "superior." USANA (www.usanahealthsciences.com) added that this transaction seemed ideal since it may facilitate a merger with or acquisition of an operating business by Innova that could generate a higher return on investment.

"This transaction is the result of much consideration," Wentz said. "Personally, I am committed to preserving and growing the USANA business operations for the long-term, so that our associates, customers and employees will not experience any disruption of their incomes or product supply."

Along with Fuller becoming chief executive officer and a director of Innova, John McCandless, former chief operating officer of USANA, will be named Innova's president and a director. All other USANA employees will become employees of Gull Sub. Fuller stated that he and McCandless are committed to increasing shareholder value by pursuing attractive acquisition opportunities. "We plan to target companies with solid balance sheets and positive cash flow, where conservative amounts of debt can be used to facilitate acquisitions that will be accretive to earnings per share," Fuller stated.