Tyco Splitting Fire and Security Businesses
The board has voted to divide into three independent businesses. One will be a commercial fire and security company with about $10 billion in annual revenue and 69,000 employees.
Tyco International Ltd. announced Sept. 19 that its board has unanimously approved a plan to divide the company into three independent, publicly traded companies: the ADT North America residential security business, a provider of flow control products and services; and a commercial fire and security business that includes Scott Safety.
"Over the last four years, we have strengthened our competitive position in our core security, fire, and flow control businesses by driving organic growth, investing in R&D and technology, increasing efficiency and productivity, and making strategic acquisitions," said Tyco Chairman and CEO Ed Breen. "Today, each business is in a strong financial position and has exceptional brands, highly skilled employees, and talented, experienced leadership. In carefully evaluating the opportunities for these businesses and for Tyco as a whole, the Tyco board of directors concluded that creating three independent, public companies is the next logical step for Tyco," he continued. "All three companies will have industry-leading positions in large and fragmented industries and enhanced capabilities to serve their distinct customers. Importantly, the new stand-alone companies will have greater flexibility to pursue their own focused strategies for growth -- both organic and through acquisitions -- than they would under Tyco's current corporate structure. This will allow all three companies to create significant value for shareholders."
The company plans to issue tax-free stock dividends of the ADT and flow control businesses to Tyco shareholders, with the result that shareholders will own 100 percent of the equity in each of the three publicly traded companies. The announcement said the transaction will be completed in approximately 12 months, subject to shareholder approval and other conditions.
Breen will be the non-executive chairman of the commercial fire and security company, a director of the flow control company, and a consultant to the ADT North America residential company when the transaction is completed.
The commercial fire and security company will offer security, fire detection, and fire suppression systems and have annualized revenue of approximately $10 billion and approximately 69,000 employees. George Oliver, currently president of Tyco's fire protection segment, will be this company's CEO.