Six months after spending $1.2 billion to buy Arch Chemicals, Lonza Group AG is not long for Norwalk where Arch has been based, putting up for sublease floors occupied by Arch at Merritt 7 Corporate Park.
More than 90,000 square feet of space is now available for sublease at 501 Merritt that has been the home of Arch, with building operator Marcus Partners confirming it is Arch space. In 2005, Arch secured a lease for 85,000 square feet of space on the building”™s first four floors, signing a smaller renewal in 2010 covering the second and third floors which it has occupied since.
The building is also occupied by FactSet Research Systems Inc., a provider of financial market feeds and information that has expanded to more than 600 employees at its Merritt 7 headquarters. Other 501 Merritt tenants include ABB, Integrated Marketing Services and Louis Dreyfus.
Lonza referenced “headcount reductions” at Arch”™s headquarters in its annual report published last month, even while emphasizing town-hall meetings its senior executives held at Arch facilities last year to emphasize “this is a story about growth, not consolidation,” as stated in the annual report.
A Lonza manager did not respond to a request for details, including whether employees are being transferred or laid off. In the tristate area, Lonza lists U.S. sites in the New Jersey towns of South Plainfield and Allendale. Arch also has a technical center in Cheshire, and large manufacturing plants in Rochester, N.Y., Georgia, and Kentucky, among other locales. At present, most of its hiring activity for corporate functions is centered at facilities in New Hampshire and Maryland.
Long billing itself as the “biocides company,” Arch sold decontaminants to scrub out impurities in products ranging from shampoo to wood coatings and pool water. Basel, Switzerland-based Lonza is a custom chemical manufacturer that sells peptides and other molecular products for use by pharmaceutical companies, as well as substances for household consumer products.
Heading into the Lonza sale, Arch reported having an employee base of 2,500 people, nearly 1,400 of them in the United States. On its website this month, Lonza reports having nearly 130 people in Norwalk. At deadline, Lonza and Arch had not filed notice with the state of Connecticut under the WARN Act, a requirement in layoffs involving at least 50 people.
Arch was created in 1999 after Olin Corp. spun off its specialty chemical business as an independent company, and knew only one CEO, Michael Campbell. In 2009 and 2010, Campbell chaired the National Association of Manufacturers while receiving $8.4 million in compensation in the recession-recovery year of 2010, up more than half from his pay in previous years.
In 2010, the last full year it reported financial results, Arch earned $71 million on sales of nearly $1.4 billion.
Arch already was consolidating some of its own facilities on the eve of the merger agreement, which Michael Campbell told analysts was less about cost cuts and more about strategic improvements.
“The consolidation will help us in ”¦ increasing creativity by getting all of our scientists together,” Campbell said at the time. “We think we”™ll get more bang out of our innovation buck.”
Even as it put its Norwalk quarters up for lease, Lonza hired Richard Ridinger as CEO, with Ridinger having previously worked for Henkel, which has its North American headquarters in Rocky Hill. Analysts saw the move as further evidence of Lonza”™s push into Arch Chemicals”™ sector.
