Tyco International will separate into three independent, publicly traded companies.
The three companies created through the separation will consist of:
- a provider of flow control products and services;
- the ADT North America residential security business;
- a commercial fire and security business.
"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," said Breen.
"All three companies will have industry-leading positions in large and fragmented industries and enhanced capabilities to serve their distinct customers.
"Importantly, the new standalone 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 intends to accomplish the separation by issuing tax-free stock dividends of the ADT and flow control businesses to Tyco shareholders, after which Tyco shareholders will own 100% of the equity in each of the three publicly traded companies.
Tyco expects to complete the transaction in approximately 12 months, subject to certain conditions including the approval of Tyco shareholders.
Upon completion of the transaction, it is contemplated that Breen will become 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.
In addition, current Tyco directors are expected to serve on the boards of each of the three companies, including the roles of non-executive chairman of the flow control company and the ADT North America residential company.
"We will have strong leadership teams at the board and management levels of all three companies, enabling each business to take full advantage of the attractive growth opportunities that lie ahead," said Breen.
As a standalone company, the existing flow control segment will be a global manufacturer of flow control products. The company designs, sells and services highly engineered valves and controls for the energy markets, general process industries, mining and water markets.
The flow control company’s activities also include the design, installation and service of heat management systems for the energy and general process industries, as well as water transmission pipelines and other water/wastewater products.
The flow control business will have annualised revenue of approximately US$4 billion and approximately 15,000 employees. Patrick Decker, the current president of Tyco’s flow control segment, will become the new company’s chief executive officer.