About 20 workers at JT Packard's Verona headquarters are out of a job after a Memphis, Tenn., corporation bought the tech company last week.
Thomas and Betts Corp. announced Jan. 20 that it would buy Packard's net assets for $22 million and assume $6 million of the company's debt.
The sale was finalized last Tuesday. Tricia Bergeron, spokesperson for Thomas and Betts, said Thursday that the company did not rehire about 15 percent of Packard's staff.
About 150 of Packard's 300 employees had worked at two offices in Verona at 275 Investment Court and 312 Locust St. The rest are located around the United States. That means 20 Verona workers lost their jobs and about 20 more nationwide are out of work, too.
Bergeron said the layoffs resulted from staffing that overlapped between Packard and Thomas and Betts. She said no more layoffs are planned and that Thomas and Betts is committed to growing JT Packard.
Bergeron would not divulge which positions were cut, though an employee of Packard told the Verona Press that at least two of the layoffs were high-ranking employees in sales and field services.
Packard was put up for sale last fall after its parent company, S.R. Bray of Anaheim, Calif., ran into financial trouble and was forced to file for receivership last June. The sale of Packard - one of Bray's biggest assets and still a profitable company - was meant to appease Bray's creditors.
Prior to a Jan. 18 auction, Packard officials predicted the company would be sold for $14 million to Sangamon Industries I, Inc., an affiliate of Chicago-based private equity firm Pfingsten Partners, LLC, and that all employees would retain their jobs.
But over the objection of Sangamon's attorneys, Thomas and Betts topped Sangamon as the winning bidder at the nine-hour auction held at the Concourse Hotel in Madison, which included 23 rounds of bidding, according to documents filed in Dane County Circuit Court.
Jeff Marwil, a Chicago attorney representing Sangamon, argued that Sangamon should have been the only bidder, in part because two other bidders - including Thomas and Betts and Horton Ridge, LLC - did not rule out terminating employees as part of the sale, according to court documents.
Marwil and the court-ordered receiver, attorney Michael S. Polsky, did not return multiple phone calls.
Founded in 1997, Packard's core business is servicing uninterruptible power supplies that prevent businesses from losing data during a power outage. Revenues in 2009 were about $60 million.
Thomas and Betts, a publicly traded global company with sales of nearly $2.5 billion in 2008, has 9,000 employees worldwide. It makes electrical components and produces commercial heating and ventilation units and steel structures used for utility transmission.
Bergeron said Thomas and Betts manufactures equipment Packard services and it will "look to JT Packard for expertise on the service component of this industry.
"We bought the business because they have excellent relations with their customers. ... And they were a much stronger player (in servicing equipment) than we were. We definitely hired them for their expertise," she said.
Court documents indicate Thomas and Betts agreed to cover an estimated $275,000 in severance packages to laid-off workers.
A former Packard employee who said she was laid off last Tuesday called the situation "depressing."
"Especially when just two weeks ago we were all assured we would have jobs," said the woman, who asked to not have her name used. "This was not JT Packard's decision, I am positive of that."
