Last Friday, it was an acquisition. On Wednesday, it was a sale. Ecolab Inc. continued its spate of news Thursday with an announcement that it will close its office in Grand Forks, N.D., by July.
The move will affect 144 workers. Most are expected to transfer to other Ecolab offices in Minnesota, Illinois, Indiana or Wisconsin, officials said. Some workers could be laid off and will get severance packages.
"Our decision to close our Grand Forks office was made after extensive analysis," said Ecolab President and Chief Operating Officer Tom Handley. "Due to recent acquisitions, we are evaluating all of our facilities to ensure we are operating as effectively as we can in fewer, more efficient facilities."
It is not known how much Ecolab will save, but the office closing is expected to provide some relief as St. Paul-based Ecolab finishes digesting its $8.3 billion Nalco acquisition from December and finalizes the pending $2.2 billion purchase of Houston-based Champion Technologies, which it announced last Friday. Ecolab also said this week it is selling its car care business to Zep Inc. for $120 million.
Edward Jones research analyst Jeff Windau said he expects more changes. "In this case, they have multiple things going on, and so are looking at their business pretty hard," Windau said. "I do expect the company to continue to look at ways to reduce costs, improve margins and improve efficiencies."
The Grand Forks workers provide accounting, customer service, human resources, computer support and other administrative functions for Ecolab's pest elimination business.
Windau and other analysts declined to say whether Ecolab's office closing in Grand Forks could mean bigger cuts in its pest control unit. The division has fit well with Ecolab's target customer base of restaurants and hotels. But the business is small, generating $329 million in annual revenue for the $11 billion Ecolab.
CEO Douglas Baker said in a statement earlier this week that he wants to focus on core businesses. That has traditionally meant providing sanitizing, cleaning and water filtration products and services to restaurants, hotels, hospitals and food plants. Now the company is also catering to oil and gas companies.
