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PhillyDeals: Tyco chairman: No merger mania despite big buy

Edward Breen, chairman of Tyco International Ltd., said yesterday that the Princeton-based conglomerate's first billion-dollar-plus acquisition in a decade doesn't mean it's back to 1990s merger mania.

Edward Breen, chairman of Tyco International Ltd., said yesterday that the Princeton-based conglomerate's first billion-dollar-plus acquisition in a decade doesn't mean it's back to 1990s merger mania.

"We really haven't said the word acquisition around Tyco for the 71/2 years I've been here," Breen told investors.

Breen was explaining why he agreed to spend $2 billion in cash and stock to buy Broadview Security (formerly Brink's Home Security) and merge it with Tyco's larger ADT alarm business, and chop $150 million from its workforce and other yearly expenses.

Breen, a Bucks County resident, has been known more for subtracting than adding at Tyco. In 2006 he broke the company in three, spinning off Berwyn-based Tyco Electronics Ltd. and medical-supplies maker Covidien P.L.C. after Tyco's share price lagged.

That left Tyco International focused broadly on its fire protection, valves and safety-and-security businesses. Tyco has been buying small companies in several of those markets all along. But Broadview was a big step.

"We're not looking at any other acquisition that would be of this size," Breen told Citigroup analyst Jeffrey Sprague, who asked if Tyco could afford more big buys.

"We're not looking at a string of deals here," Breen added. Just "a bolt-on or two." Selective acquisitions in "fragmented" U.S. industries.

Analyst Shannon O'Callaghan, of Barclays Capital, asked about overseas deals.

More likely, said Breen: "Emerging markets particularly are very attractive for us," since some of those markets are growing so rapidly, compared to the United States.

Joining Molina

Is everything at Unisys Corp. for sale?

The company said yesterday it would sell its $110 million (yearly sales) health-information management business, which tracks Medicaid payments for New Jersey and several other states, to Long Beach, Calif.-based Molina Healthcare Inc., for $135 million cash. Nine hundred Unisys workers, most based in Trenton and other state capitals, will join Molina.

"We've been talking to the folks at Unisys on and off for several years," chief financial officer John Molina told me (his brother, Dr. J. Mario Molina, is chief executive officer). Talks speeded up after J. Edward Coleman took over as Unisys' chief executive last year.

"They're some pretty smart business folks at Unisys," John Molina added. "There's been lots and lots of back and forth. I got the sense they want to focus on a few lines of business, and this wasn't one of those lines."

"I wouldn't say this is a non-core business," Unisys spokesman Jim Kerr told me.

So why sell? It's "part of our turnaround program," he said. The cash will "strengthen our balance sheet and reduce debt."

Helicopter deal

The Army is moving upgrade work on new Boeing CH-47F Chinook helicopters, bound for the wars in Iraq and Afghanistan, from Fort Campbell, Ky., and field locations, to the vacant former Millville Jet Center at Millville Airport, Boeing spokesman Bradley Mudd told me.

If a lease is finalized soon, work adding infrared-suppression systems and other upgrades will start "within the next few weeks," adding 20 workers this year and up to 100 over the four-year life of the contract.

The Delaware River and Bay Authority, the two-state political body that controls major land, air and water routes into Delaware and also operates Millville's airport, approved the deal at its board meeting yesterday, spokesman James Salmon told me.

He said the jet center, which once employed 75 at a facility partly built by DRBA with federal, state and local tax funds, closed last year, laying off its last 15 workers. Negotiations with the Army started in October, he added.

Why Millville? "The facilities are ready to go," and they are close to the Chinook manufacturing facility in Ridley Park, Delaware County, Salmon said. Which congressman are we supposed to credit? "There wasn't any need for political muscle, to the best of my knowledge," Salmon said.