TYCO INTERNATIONAL

'Tyco International Ltd.' is a diversified manufacturing conglomerate incorporated in Bermuda, with United States operational headquarters in New Jersey. Through mid 2007 major business areas of Tyco included electronic components, health care, fire safety, security, and fluid control. Subsequently the electronics and health care divisions were spun off.
Tyco International Ltd. has no connection with Tyco Toys, a division of Mattel.

Contents

1980s

1990s

2000-Present

Company separation

Legal charges

Products

See also

References

External links

Data

Articles

1980s

Tyco acquisitions and growth:^[2]

★ Mueller Company

★ Wormald

★ Hindle valves

★ Earth Technology Corporation

★ Thorn Security

★ ADT

★ Electrostar

★ Wells Fargo alarms

★ AMP (1998)

★ Siemens Electrochemical Components

1990s

In 1992, Dennis Kozlowski became CEO of Tyco, and for the next several years, the company adopted an aggressive acquisition strategy, eventually acquiring (by some accounts) over 1000 other companies between 1991 and 2001.
In 1993 Tyco launched ''The Pipeline'' the internal employees newsletter. This was later changed to ''Tyco World''. The final issue of which was published in April/May of 2006.
By 1996 Tyco International had been added to the Standard & Poor's S&P 500 Composite Index, which consists of 500 of the largest companies in the United States.^[3]
Prior to 1997 Tyco International Ltd. was incorporated in Massachusetts. In July 1997, Tyco International Ltd. merged with a wholly-owned subsidiary of a smaller publicly-traded security services company named 'ADT Limited', which traded under stock symbol ADT. Upon consummation of the merger, the former Tyco International Ltd. of Massachusetts became a wholly-owned subsidiary of the publicly traded company ADT Limited, and simultaneously ADT changed its name to Tyco International Ltd., and retained the former Tyco stock symbol, TYC.^[4]
A new subsidiary then formed out of the merger named ADT Security Services, Inc.. After the merger, Tyco moved its incorporation to Bermuda in 1997, headquarted at 90 Pitts Bay Road, Hamilton, Bermuda. While publicly part of the merger (ADT was already incorporated in Bermuda), this move was controversial as it was seen as a use of a tax haven. This tax advantage was promoted in literature to shareholders and investors.
In 1999, just prior to a stock split, rumors of accounting irregularities surfaced. The rumours were strongly denied by Tyco's leadership, who accused the sources of selling Tyco shares short for personal gain. Partly in response to this, shareholders fought a proxy battle to reincorporate in Delaware, but this effort was rebuffed by the board of directors.
Also in 1999, Tyco acquired two S&P 500 companies, the electronics connector manufacturer AMP Inc., and the fuse maker Raychem Corp. in a US$3 billion buyout.^[5]
During this time, Tyco spun off the deep-sea fiber optic cable laying division it had purchased from AT&T as Tyco Submarine Systems in a much anticipated IPO.
Throughout the 1990s, Tyco's earnings seemed to improve steadily, with many investors giving it blue chip status. In hindsight this may have been an illusion generated by the ways in which the acquisitions were treated on the company's books. Unlike other companies where fraud and other charges were made public in 2001, 2002 and 2003 such as Enron and HealthSouth, Tyco was never in a cash crisis.

2000-Present

For the year ended September 2000 Tyco revenue exceeded US$28 billion. Almost US$2 billion that year came from the sale by a subsidiary of its common shares.
On October 17, 2000 Tyco acquired Mallinckrodt Inc. for its Healthcare unit.
On January 4, 2001, Tyco acquired Simplex Time Recorder Company for US$1.15 billion in cash from Chris Watkins, the grandson of the company's founder. By January 2002 Tyco merged Simplex Time Recorder Co. with Grinnell Fire Protection to form an indirect wholly-owned subsidiary, SimplexGrinnell LP, the world's largest fire protection company. For the year ended September 2001 Tyco revenue exceeded US$33 billion. The same year, the company more than doubled its long-term debt, by over US$10 billion.
In October 2001 the Engineered Products and Services segment acquired Century Tube Corp, and then Water & Power Technologies in November 2001.
In November 2001 the Tyco Electronics segment acquired Transpower Technologies.
In December 2001 the Plastics and Adhesives segment acquired LINQ Industrial Fabrics, Inc.
On December 18, 2001 Tyco International completed its amalgamation of TyCom Ltd. as a wholly owned subsidiary, which was then brought under control by the Tyco Electronics segment, and became the Submarine Telecommunications unit.
In January of 2002 Tyco announced a plan to split the company into four separate companies; however, this plan was abandoned, after a downgrade in its credit rating, and a significant drop in its stock price.
Also in January 2002 Tyco Electronics segment acquired Communications Instruments, Inc., and the Healthcare segment acquired Paragon Trade Brands.
In February 2002, the Engineered Products and Services segment acquired Clean Air Systems.
In early 2002, the Fire and Security segment of Tyco acqired SBC/Smith Alarm Systems, DSC Group, and Sensormatic Electronics Corp.
Following the 2001 recession, during the first quarter of 2002 the Electronics segment recorded a charge of over US$2 billion, related to massive overcapacity of fiber optic cable at that time, which in turn affected the in-process buildout of Tyco International's global undersea fiber optic network, known as Tyco Global Network (TGN). In 2002, TGN generated a loss of over US$3 billion, with a restructuring charge of over one half of US$1 billion. Construction of TGN was completed in 2003.
Also in 2002 the Electronics segment recorded over US$1 billion in restructuring charges, over half for inventory write-down and the balance for facility closures that year. The fiber cable overcapacity issue and other corporate problems in the second quarter of 2002 also led to a goodwill impairment of over half of US$1 billion in the Electronics segment, related to Tyco Submarine Telecommunications, which Tyco had fully acquired the prior year for the buildout of the underwater TGN. Another Electronics segment goodwill impairment of a quarter of US$1 billion related to sales issues in Power Systems, Electrical Contracting Services, and the Printed Circuit Group.
During 2002 Tyco also lost over a quarter of US$1 billion in investment in FLAG Telecom Holdings Ltd.
In 2002, Tyco became embroiled in a massive scandal involving the excesses by its former Chairman and CEO, L. Dennis Kozlowski, and other officers and directors. As as consequence, on June 17, 2002 Tyco filed federal suit against Mark A. Belnick, Tyco's former Executive Vice President and Chief Corporate Counsel, and also against Frank E. Walsh, a former director.
On July 8, 2002 Tyco divested its Tyco Capital business through an initial public offering, with the sale of 100% of the common shares in CIT Group Incorporated. Tyco recorded the CIT divestment as discontinued operations for 2002, for a US$6 billion loss, and as an almost US$7 billion impairment charge. Also in July 2002 the Tyco Healthcare segment divested Surgical Dynamics, Inc.
On July 25, 2002 Edward D. Breen was appointed President, CEO and Chairman of Tyco International for an initial three-year term. He had previously been President and COO of Motorola since his promotion at that company in January 2002.
On September 12, 2002 and also on December 6, 2002 Tyco filed two federal suits against former CEO Kozlowski. Also, on October 7, 2002 Tyco filed an arbitration claim against Mark H. Swartz, its former CFO and director. However, when Swartz failed to submit to the American Arbitration Association, Tyco on April 1, 2003 followed that with a federal suit against Swartz as well.
For the year ended September 2002 Tyco revenue was up, to nearly US$35 billion. However, Tyco suffered over a US$9 billion loss that year, which included the asset impairment write-down of TGN by over US$3 billion, losses of nearly US$2 billion for the two restructuring charges, and over US$1 billion from the two goodwill impairment charges. In all, the net charges totalled nearly US$7 billion of the loss that year. The stock price plummetted.
On November 27, 2002 the State of New Jersey filed federal suit against Tyco and former personnel, with charges in part of violating the New Jersey RICO Statute, stemming from the Kozlowski scandal.
As a result of the scandal, Tyco and some former directors and officers were named as defendants in more than two dozen securities class action lawsuits. Most of the cases were consolidated and transferred to the United States District Court for the District of New Hampshire, and filed by court-appointed lead plaintiffs on January 28, 2003 as the case "''In Re Tyco International Securities Litigation''", citing causes of action under the Securities Act of 1933 and the Securities Exchange Act of 1934. On March 31, 2003 Tyco made a motion to dismiss, which was granted in part over a year later on October 14, 2004.
On February 3, 2003 Tyco and some personnel were also named as defendants in an amended consolidated class action federal suit brought on behalf of retirees in its Retirement Savings and Investment Plans, citing causes under the Employee Retirement Income Security Act. On December 2, 2004 the New Hampshire court granted in part Tyco's motion to dismiss.
In 2003, in response to the Dennis Kozlowski scandal, the company adopted the ''Guide to Ethical Conduct'' in order to guide and advise employees as to correct procedures and warn of unethical practices and behavior. All Tyco employees are now required to take a brief ethics course and sign an ethics statement annually.
By year end September 2003, revenue was again up, reaching close to US$36 billion, and the company returned to profitability, by nearly US$1 billion that year, despite more asset impairments and other charges totalling nearly US$2 billion. Over half of US$1 billion of that was a charge in the Fire and Security segment related to ADT Security. The loss from TGN in 2003 was under three quarters of US$1 billion, and the business was then held for sale by Tyco the following year. Notably in 2003, the US Dollar fell strongly against the Euro. The change in foreign exchange rates benefitted Tyco, accounting for US$1.7 billion of the increase in revenue that year.
In November 2003 Tyco International Group S.A. issued US$1 billion in ten-year notes at 6.0% in a private placement offering, which was then used to pay down a portion of US$2 billion outstanding in the revolving credit facility due 2006. On November 18, 2003 Tyco purchased nearly US$2.5 billion of zero coupon debentures due 2020.
In early 2004 Tyco began a divestiture program following a review of its core businesses in the prior year. Part of the plan was to sell TGN, which by then had been entirely written off in value, and agreement for the sale was reached in November 2004. In the second quarter of 2004, ADT Security sold off Sonitrol. In all, within its divestiture program, by September year end of 2004 Tyco had divested twenty-one businesses and liquidated four non-core businesses, primarily within the Fire and Security segment.
In September 2004 Tyco also divested Electrical Contracting Services from the Electronics segment, due to a decrease in sales. After September 30, Tyco divested an additional seven non-core businesses, bringing the program aggregate proceeds up to half of US$1 billion that year.
By the end of 2004 Tyco employed under 260,000 people, with two-thirds outside the United States. Revenue was up strongly that year, to over US$40 billion for the first time ever. Once again the strengthening Euro against the US Dollar helped Tyco, accounting primarily for US$1.5 billion of the increase in revenue. Various charges, losses and debt repayment totalled nearly US$1 billion in 2004, however profitability tripled that year to almost US$3 billion. Also, Standard and Poor raised Tyco's long-term debt rating to BBB from BBB-, along with upgrades from Moody's and also from Fitch. Since at least 2000, Tyco's quarterly dividend had remained at US$0.0125 per share. On December 9, 2004, the Board of Directors approved an increase to US$0.10 per share.
In 2005, Videsh Sanchar Nigam Limited (VSNL), India acquired the Tyco Global Network (TGN) from Tyco International for US$130 million. The chief stockholder in VSNL is India's Tata Group, also one of that country's largest conglomerates. It was once valued at US$3 billion during the telecommunications bubble.
In January 2006 the company announced its split into three separate companies.

Company separation

An announcement was made publicly on January 13, 2006 that the company would subdivide into three smaller independent companies.
An official ''Separation Management Team'' was created to deal with all aspects of the separation and to make it as smooth as is possible for customers, employees and shareholders. Bob Scott was announced as the leader of the SMT.^[2] Scott had joined Tyco in 2004.
On June 29, 2007 Tyco International completed the share distribution which separated the company into three wholly independent, publicly traded companies,^{[7] [8] [9]} each with their own board of directors, CEO, management staff and financial structure.^[10]
The three new companies became:

★ Covidien Ltd., formerly Tyco Healthcare

★ Tyco Electronics Ltd.

★ Tyco International Ltd. (New), formerly Tyco Fire & Security and Tyco Engineered Products & Services (TFS/TEPS)
Edward D. Breen, CEO of Tyco at the time of the split announced that he would be staying on as CEO of the newly structured Tyco International, overseeing TFS/TEPS.
Completing the share distribution, on June 29 shareholders received one common share each of the two new companies, Covidien and Tyco Electronics, for every four common shares held of the old Tyco International stock. On July 6, 2007 the new Tyco International issued a one-for-four reverse stock split.

Legal charges

Former chairman and chief executive Dennis Kozlowski and former chief financial officer Mark H. Swartz, were accused of the theft of US$600 million from the company. During their trial in March 2004, they contended the board of directors authorized it as compensation.
During jury deliberations, juror Ruth Jordan, while passing through the courtroom appeared to make an "okay" sign with her fingers to the defense table. She later denied she had intended that gesture, but the incident received much publicity (including a caricature in the Wall Street Journal), and the juror received threats after her name became public. Judge Michael Obus declared a mistrial on April 2, 2004.
On June 17, 2005, after a retrial, Kozlowski and Swartz were convicted on all but one of the more than 30 counts against them. The verdicts carry potential jail terms of up to 25 years in state prison. Kozlowski himself was sentenced to no less than eight years and four months and no more than 25 years in prison.

Products

Some of the many products made by Tyco include:

★ Fire alarm systems (Simplex)

★ Fire Fighting hardware and foam concentrates (Ansul, Skum, Total Walther and Sabo)

★ Electronic components and cables. AMP

★ Circuit protection devices

★ Critical communications systems. OpenSky and EDACS

★ Engineering services

★ Fire sprinklers. SimplexGrinnell, Wormald

★ Medical supplies (Kendall wound care, Monoject syringes, Shiley endotracheal tubes)

★ Pharmaceuticals (leading producer of narcotics and acetaminophen), Mallinckrodt laboratory chemicals

★ Cyberskin

★ Security systems (ADT)

★ Curad brand bandages

★ Valves and Controls

★ Pressure Relief Valves for Nuclear Power Generation

★ Safety Products [including Industrial site safety & Personal Protective Equipment (PPE)

★ EAS(Electronic Article Surveillance) & RFID (Radio Frequency Identification) Products [Sensormatic]

★ CCTV / Access Control Equipment. American Dynamics, Kantech, Software House

★ Touchscreen Displays. ELO Touch Displays

See also

★ Corporate abuse

References

1. Standard and Poor's 500 Guide, , , Standard and Poor's Corporation, McGraw-Hill, ,
2.
3. Sam Stovall, ''Sector Investing'', McGraw Hill, 1996, Appendix A, The S&P 500 Composite Index, ISBN 0-07-052239-1
4. 2004 Annual Report
5. Tyco in US Billion Buyout of Raychem
6.
7. ABC News
8. Official Tyco press release
9. Tyco Separation Update press release
10. Important Tax Information Concerning the Distribution of Tyco Electronics Ltd. and Covidien Ltd., July 3, 2007

External links

★ Tyco International official website

★ Tyco Healthcare

★ Tyco Electronics

★ Tyco Fire & Security

★ Competitors of Tyco Healthcare in the hygiene sector worldwide

★ The Tyco 2005 Annual financial report (PDF) May be the last one of the fully incorporated Tyco International.

★ The Tyco 2006 Annual financial report

Data

★ Yahoo! - Tyco International Ltd. Company Profile

★ Tyco International Company Profile and News Archive

★ Tyco International stock chart

Articles

★ Forbes.com: Tyco's Goodwill Games