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A Winning Combination



Lonza's $1.2 billion acquisition of Arch Chemicals creates a global leader in the $10 billion microbial control segment.



By Tom Branna, Editorial Director



Published January 10, 2012
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It’s the perfect fit of complementary chemistry and hard assets, according to company executives. The completion of Lonza’s $1.2 billion acquisition of Arch Chemicals last year puts a broad range of microbial control solutions under one roof for the personal care, household, industrial and institutional cleaning markets.


The acquisition of Arch, which reported sales of $1.4 billion in 2010, also made Lonza the leader within the $10 billion global microbial control market, which is growing 4-5% a year, according to industry observers.


But while the sheer size of the acquisition is impressive, a Lonza executive is quick to point out that the big winners to emerge from the deal will be customers.

 

“Our customers will benefit from a broader portfolio of registered active ingredients and formulations,” explained Frank Kicklighter, Lonza Microbial Control’s head of marketing and communications. “We have enhanced capabilities in toxicology, regulatory and innovation and we can now offer these services to a broader range of customers in both emerging and established markets.”

Lonza has a long history as a leader in cosmetic preservatives including hydantoin and isothiazolone chemistry. Some of the preservatives in the Lonza lineup include Dantogard 2000, a high performance preservative for household and industrial applications that’s based on DMDM hydantoin. The EPA-registered, cost-effective preservative provides broad-spectrum activity and is typically used at 0.05-0.4%.


What Arch Brings


For its part, the Arch business is the world’s leading supplier of zinc pyrithione, the No. 1 anti-dandruff ingredient, as well as natural and organic cosmetic ingredients, cosmetic preservatives and biotechnological actives.


In addition, it offers expanded technologies for cleaning, disinfecting, sanitization and preservation in many business segments, including household/consumer, institutional, industrial, food safety and healthcare.


In terms of geographic reach, Arch brings facilities in North America and Europe, as well as in South Africa and across the Asia-Pacific region.


More, More, More


At press time, Lonza was still in the integration phase regarding its Arch purchase, but Kicklighter assured Happi that customers will ultimately see more innovation from Lonza.


“We are focused on developing the right organization and culture,” said Kicklighter. “We certainly have a great talent pool.”


The acquisition also expands Lonza’s global footprint. Prior to the purchase, Lonza was historically strong in North America, Europe and Asia. Arch extends the Lonza footprint in these regions, while creating a bigger presence in South America, Africa and across the Asia-Pacific region.


Moreover, the acquisition of Arch brought into the Lonza fold an additional 17 production and R&D facilities, including the Innovation & Technology Center in Alpharetta, GA, which Kicklighter called a “world-class” facility. Opened in September 2011, the $10 million, over 65,000 square-foot facility includes space dedicated to innovation and process technology, applications research, GLP analytical labs, and a top-of-line microbiology infrastructure. For its customers, the Arch acquisition immediately creates a broader array of product offerings and services, but Kicklighter insisted that household, personal product and I&I marketers will reap many more benefits.


“We have a strong commitment to innovation,” assured Kicklighter. “The new business will increase research and development and new product development across all platforms.”


With that kind of commitment, household and personal product marketers are sure to benefit from Lonza’s acquisition of Arch.



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