Friday, April 18, 2014
Inquirer Daily News

Tyco to split, again

Princeton-based conglomerate to break out ADT, fire, pipeline units

Tyco to split, again

(Revised; adds HQ for new businesses, and details of previous split) Tyco International Ltd, the industrial conglomerate based in Switzerland for tax and finance reasons but actually run from an office complex near Princeton, NJ, says it's going to split into three publicly-traded companies, each run by its current boss:

Tyco Commercial Fire and Security, with sales of $10 billion, will employ 69,000 and be run by George Oliver from the company's current West Windsor Township headquarters (its fire-supression business will continue to run from the former Central Sprinkler offices in Lansdale;

- Tyco Flow Control, a valve and pipeline maker, with sales of $4 billion, will employ 15,000 and be run by Patrick Decker from an as-yet undetermined location;

- ADT North American Residential, home alarms, with sales of $3 billion, will employ 16,000 and be run by Naren Gursahaney from its current offices in Boca Raton, Fla.

- "Three independent, public companies is the next logical step," said Tyco boss Ed Breen in a statement. The split will cost $700 million in job severance, banker and lawyer fees, and refinancing payments, though some of that money will be recovered as lower costs going forward.

Breen, a former ITT executive who took over the company from disgraced ex-Tyco boss Ed Kozlowski, has said in the past he will split the company if central management can't financially justify keeping it together by profiting investors. He previously split the company in 2007, separating out Covidien, a healthcare-products business based in Massachusetts, and Tyco Electronics (now TE Connectivity Ltd.), of Berwyn.

Carol Levenson, credit analyst at Gimme Credit LLC, said Tyco hasn't told much yet about how the deal will affect bondholders; she's worried the successor companies will lack diversification and become more vulnerable to market downturns.  Bloomberg reports Tyco's long-suffering shareholders could get a boost as the spin-offs go public.

Joseph N. DiStefano
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PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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