| | Any idea on the value of each of the four units?
The pro forma results for the businesses described below are presented as if the proposed structure was in place for the year ended September 30, 2001. Pro forma operating profit and margins are earnings before non-recurring charges and credits, interest, taxes and goodwill amortization. Results for Tyco Capital's business are pre-tax profits, before goodwill amortization, as reported for the four quarters ended September 30, 2001. Results before non- recurring items are commonly used as a basis for operating performance, but should not be considered an alternative to operating income determined in accordance with generally accepted accounting principles.
Security & Electronics
Pro Forma 2001 Revenues $17.6 billion
Pro Forma 2001 Operating Profit $4.2 billion
Pro Forma 2001 Margin 23.7%
With pro forma 2001 revenues of approximately $17.6 billion, Tyco's Security & Electronics business would consist of the world's largest and most respected residential and commercial security services company, and one of the world's largest manufacturers of a broad range of high quality electronic component products; multi-layer printed circuit boards; electrical and electronic components; power systems; and fiber optic and wireless interconnection solutions.
Many of the components being utilized for the basic infrastructure of security monitoring are the same products and systems being developed and sold by Tyco's electronic manufacturing units for the computer, telecommunications and other electrical and electronic markets. Bringing these units together as one publicly traded company is the logical extension of the development of both the security and electronics manufacturing units.
Dennis Kozlowski will be Chairman and CEO, and Mark Swartz will be CFO, of the Security & Electronics company.
The world's leading provider of electronic security services and event monitoring, Tyco security services are provided worldwide under the ADT trade name. Tyco recently completed acquisitions of Sensormatic, a supplier of electronic security systems and the leader in integrated sourcing tagging for consumer goods, and SecurityLink Protection Services, which expanded ADT's capabilities in the market for personal emergency response systems. Tyco monitors over seven million customer sites.
Tyco Electronics' products have potential uses wherever an electronic, electrical, computer or telecommunications system is used and are becoming increasingly critical to the performance of these systems as signal speeds and bandwidth increase to accommodate voice, data and video communications convergence. This business combines the historical leadership in the interconnect industry of AMP with forward-looking companies like ASG, Elcon, Elo TouchSystems, HTS, M/A-Com, Raychem and Tyco Telecommunications (formerly TyCom). Tyco Electronics manufactures and sells more than 200,000 parts in over 450 global product lines. Tyco Electronics serves over 200,000 customers in more than 55 countries, and maintains a strong local presence in the regions where it operates. Tyco Telecommunications provides global broadband capacity through the TyCom Global Network, and designs, manufactures, installs, operates and supports turn-key subsea optical networks for many of the world's leading carriers.
Healthcare
Pro Forma 2001 Revenues $7.1 billion
Pro Forma 2001 Operating Profit $1.7 billion
Pro Forma 2001 Margin 24.4%
Healthcare is the second largest medical device provider in the world and offers one of the broadest ranges of disposable medical products in the industry. It holds world-leading positions in each of its four primary businesses: Kendall Healthcare, U.S. Surgical, ValleyLab and Mallinckrodt.
Kendall Healthcare manufactures and markets a broad range of wound care, needles and syringes, vascular therapy, urological care, incontinence care, sharps disposal and nursing care products under market-leading brand names, including Kerlix(R) and Curity(R). U.S. Surgical provides innovative wound closure products and laparoscopic instrumentation. ValleyLab designs, develops and manufactures electro- and ultrasonic surgery systems, which are continuing to raise the standards in patient care and safety in the operating room. Mallinckrodt is a global manufacturer of healthcare products for the respiratory, alternate care, bulk pharmaceutical and diagnostic imaging markets.
Rich Meelia, who has served as President of Tyco Healthcare since 1995, will be President and Chief Executive Officer. Chuck Dockendorff will continue to serve as the company's Chief Financial Officer.
In May 2001, Tyco announced an agreement to acquire C.R. Bard, Inc., a leading multinational developer, manufacturer and marketer of healthcare products used for vascular, urological and oncological diagnosis and intervention, as well as surgical specialties. The acquisition is contingent on regulatory clearance under U.S. anti-trust laws.
Healthcare manufactures, markets and distributes its products directly to hospitals and medical professionals, as well as through independent distributors, around the world. Thirty-percent of its fiscal 2001 sales came from international operations in 75 countries, primarily in Europe, Latin America and the Asia-Pacific region.
Fire Protection & Flow Control
Pro Forma 2001 Revenues $7.6 billion
Pro Forma 2001 Operating Profit $1.3 billion
Pro Forma 2001 Margin 17.1%
Tyco is the world's leading provider of fire detection, prevention and suppression products, installation and services, and a top global manufacturer of standard and highly specialized valve and control products. The two businesses are being combined to take advantage of significant operating and marketing synergies. The two groups serve a host of common customers and market segments, and a substantial portion of Tyco's valve and flow control products are used by the company's fire protection businesses. Fire Protection & Flow Control will also include Allied Tube, the leading fire protection pipe manufacturer in the United States, and Tyco Infrastructure Services (formerly Earth Tech), a global leader in the water, environmental, transportation, and construction marketplace.
Tyco's fire protection units design, install and service automatic fire sprinkler systems, fire alarm and detection systems, and special hazard suppression systems. These businesses operate through a worldwide network of sales offices under the trade names: Simplex/Grinnell, Wormald, Mather & Platt, Total Walther, O'Donnell Griffin, Dong Bang, Ansul and Tyco. In May 2001, Tyco acquired Scott Technologies, expanding its line of fire protection products to include respiratory systems and other life-saving devices for the firefighting and aviation markets.
Tyco's flow control operations manufacture valves in a wide variety of configurations serving markets in the water distribution, power generation, chemical, oil and gas, pulp and paper, commercial irrigation, mining and industrial process, and plumbing industries, among others. Its valves and related products are sold under several trade names such as: Keystone, Grinnell, Hindle, KTM, Flow Control Technologies, among others.
Fire Protection & Flow Control will be run by Chief Executive Officer Jerry Boggess, who has led Tyco's Fire business since 1989. Jack Guarnieri, a senior finance executive within the flow control business, will be its Chief Financial Officer.
Financial Services
Pro Forma 2001 Revenue $5.4 billion
Pro Forma 2001 Pre-tax Earnings $1.2 billion
Tyco Capital is a leading, global source of financing and leasing capital and an advisor for companies in more than 30 industries. Managing approximately $50 billion in assets across a diversified portfolio, Tyco Capital, formerly known as CIT, offers vendor, equipment, factoring, consumer, and structured financing capabilities. Tyco Capital operates extensively in the United States and Canada with strategic locations in Europe, Latin and South America, and the Pacific Rim.
Tyco Capital has established itself as the financing leader in a variety of industries. It has a number one position in vendor financing, factoring, construction equipment financing, and Small Business Administration loans. It is also a leader in printing, machine tools, rail, corporate aircraft, commercial aerospace, asset-based and credit-secured lending and advisory-structured finance.
Al Gamper will continue to serve as President and Chief Executive Officer of Tyco Capital. Joe Leone will continue as Executive Vice President and Chief Financial Officer.
Since its acquisition by Tyco on June 1, 2001, Tyco Capital has divested over $5 billion of non-core, less profitable assets and reduced annual operating expenses by $150 million. In December 2001, Tyco Capital announced an agreement to acquire McGrath RentCorp, a leading rental provider of modular offices, classrooms and electronic test equipment. The transaction is subject to customary regulatory review and approval by McGrath RentCorp shareholders.
Should be an interesting year! |
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