Tyco selling majority Electric and Metal Products to Clayton Dubilier Rice
By Craig Pearson
Tyco International Ltd. is selling a 51% stake in its Electrical & Metal Products business to the private equity firm Clayton Dubilier & Rice LLC for total cash proceeds of about $720 million US, which it will use to “accelerate share repurchases” under a $1-billion program announced by the company back in September.
The Electrical & Metal Products business designs, manufactures and sells galvanized steel tubes and pipes, electrical conduit, armoured wire and cable, metal framing systems and building components. The business serves a range of construction, electrical, fire, security and mechanical applications, generating revenue of $1.4 billion in 2010.
This business will operate as a stand-alone entity under the name Atkore International (Atkore). Following the transaction, Tyco’s ownership interest in Atkore will be accounted for under the equity method of accounting.
“This transaction is attractive for both Tyco and Atkore,” said Ed Breen, Tyco’s chair and CEO. “Selling a portion of this business now provides us with significant cash while preserving our ability to benefit from a subsequent divestiture of our remaining stake in Atkore as its underlying end markets strengthen. The transaction sharpens our focus on our core security, fire and flow control platforms and reduces our exposure to the cyclical steel and copper markets.”
“The transaction also gives Atkore the opportunity to pursue its business strategy as a stand-alone entity with a strong partner that has a demonstrated track record of collaborating with management teams to help their businesses reach their full potential,” added Breen. “Given the strength of its brands, management team and workforce, and its excellent reputation with customers, this business is well positioned to thrive, particularly as the non-residential construction market recovers.”
The transaction is subject to the satisfaction of customary closing conditions and is expected to close in the December-January timeframe.
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