Jubilant news a joy for HollisterStier employees

HollisterStier Laboratories President Anthony Bonanzino received lots of telephone calls and e-mails after Tuesday’s announcement the Spokane company will be purchased by India-based Jubilant Organosys. One, he told employees, was utterly misguided:

“My sympathies for all those employees whose jobs are going to India,” it read.

Nobody is going anywhere except the chief financial officer, who can expect periodic flights to Bangalore, where he will deliver financial reports in person.

Bonanzino says Jubilant has no intention of uprooting HollisterStier, or even changing the name.

“You don’t pay $138.5 million for a U.S. pharmaceutical company to close it and move it to India,” he said. Just the costs of recertifying all production processes with U.S. regulators would take years and additional millions.

And a move would discard the company’s most valuable resource, its 450 people, who wowed the Jubilant officials and advisers who toured the HollisterStier plant on North Regal during negotiations.

“You have no idea the impression you have on visitors when you make eye contact and say hello,” Bonanzino said during an employee briefing sometimes broken by friendly banter. He contrasted the spirit with the morgue-like atmosphere at a plant owned by a company competing with Jubilant to buy HollisterStier.

He said the disturbing possibility the company would be bought by the other, higher bidder had him pleading with HollisterStier’s majority investors, Windward Capital Partners, not to accept their proposal. In a decision rare for a private investment group, they went with Jubilant.

“That speaks volumes about the character of the people at Windward,” Bonanzino said.

The investors stuck with HollisterStier a remarkably long time, almost eight years, far beyond the time frame equity groups normally expect to sell their holdings. The Spokane company was the last to be liquidated.

Bonanzino was almost effusive about Jubilant, a 29-year-old company founded as a chemical manufacturer. The company adopted its current name in 2001 to reflect its transformation into biomedical research and production.

Jubilant has become India’s largest custom research and manufacturing services company, with 3,300 employees and a market capitalization of $2 billion. Profits doubled during the most recent nine-month period.

Bonanzino said he confirmed his own favorable impression of the company by checking with others in the industry. The feedback was universally positive.

He said Shyam S and Hari S Bhartia, the brothers who manage and own a majority stake in Jubilant, have several other investments, including Domino’s Pizza franchises in India.

“They have not made their fortune by standing still,” Bonanzino said. Jubilant is already discussing a $10 million investment in a third line for filling vials with liquid pharmaceuticals, HollisterStier’s biggest and fastest growing business line. The comment that drew a few gasps from managers pushing to complete the second line.

Scaffolding encloses new construction at both ends of HollisterStier’s main building, and the workforce has exploded to more than 450.

There may be growth in store, too, for the allergy business that has been HollisterStier’s specialty since the company was founded. Bonanzino could not suppress a smile when told one-fifth of India’s one billion people have allergies.

He said he had no qualms about foreign ownership despite frustrations with a previous owner, Bayer. Decision-making at the German company was highly centralized, he said. Jubilant, which has two other U.S. operations, lets local managers run the show.

“This could not have worked out better for our organization,” Bonanzino said.

Nor for Spokane. And the Jubilant investment is the second made recently in a long-time local company by a foreign company. A Danish firm, FLSmidth & Co. A/S, last month purchased the materials-handling business of RAHCO International.

The deals affirm the world-class status of both companies, and reaffirms Spokane’s attraction as a place to invest. Not just in physical assets but, more importantly, in the people.