ConvaTec Closing N.J. Office, Laying Off 118 Workers

Medical device maker ConvaTec is closing its Skillman, N.J., office and laying off 118 employees in the sales, marketing and human resources divisions.

ConvaTec will keep about 100 support staff employees from the Somerset County location, and they will operate from a smaller office in New Jersey, company spokesman Robert McKee said. 

The company’s two-building campus off in Skillman will be closed at the end of April, McKee said. ConvaTec’s New Jersey presence has shrunk in recent years, he said, with all employees operating out of one building. The company owns both properties.

McKee said the closure and layoffs were related to “the consolidation of our office space,” and did not have to do with a restructuring plan.

Workers received layoff notices earlier this year, in accordance with state law that requires employers provide 60 days notice. Because the affected employees were told not to return to work, they received two months pay, and will be given severance packages and help with job placement, McKee said.

ConvaTec, which reported $1.6 billion in sales in 2012, is a global firm with headquarters in Luxembourg. It employs about 8,000 workers in 90 countries and specializes in ostomy care (a surgically created opening in the body)  wound therapeutics and infusion devices.

ConvaTec had been a subsidiary of drugmaker Bristol-Myers Squibb until 2008 and is now owned by the private equity firms Nordic Capital and Avista Capital Partners. Its other offices in the United States are in Greensboro, N.C., and Oklahoma City, Okla.

The downsizing does not bode well for the devicemaker, which has experienced its share of ups and downs in recent years: After being sold to Nordic Capital and Avista for $4.1 billion, the company set its sights on expansion and began to carve a niche for itself in the areas of ostomy care, wound therapeutics, infusion devices, continence and critical care.

After a thwarted attempt to acquire wound-care specialist Kinetic Concepts in 2011—and in an effort to diversify its portfolio—ConvaTec dropped $321 million on 180 Medical, an Oklahoma City devicemaker specializing in urologic and disposable medical supplies. The company also settled a patent dispute with rival Smith & Nephew plc over the manufacturing process for its silver wound dressing in 2012. It seemed as if ConvaTec finally was enjoying a period of relative calm, until it was slapped with a U.S. Food and Drug Administration warning letter for the manufacture of several incontinence devices last June.