Tyco International
Encyclopedia
Tyco International Ltd. is a highly diversified global manufacturing company incorporated in Switzerland
, with United States
operational headquarters in Princeton, New Jersey
(Tyco International (US) Inc.). Tyco International is composed of three major business segments: Security Solutions, Fire Protection and Flow Control
.
In June 2007, Tyco concluded a corporate separation that split the company into three publicly independent companies: Covidien Ltd. (formerly Tyco Healthcare), Tyco Electronics Ltd. (now TE Connectivity Ltd.) and Tyco International Ltd. (formerly Tyco Fire & Security and Tyco Engineered Products & Services (TFS/TEPS))
Tyco International announced in January 2010 that it is acquiring Brink's Home Security Holdings, (operating as Broadview Security) in a transaction valued at $2.0 billion.
It is reported that Broadview Security will merge into Tyco's ADT Security Services
division.
In 1962, the business was incorporated in Massachusetts
and refocused on high-tech materials science and energy conservation products. Two years later in 1964, the company went public and began to fill gaps in its development and distribution network by acquiring Mule Battery Products, the first of Tyco’s 16 acquisitions in the next four years.
In the 1970s Tyco boomed, beginning the decade with consolidated sales and stockholder equity reaching $34 million and $15 million, respectively.
In 1974, Tyco was listed on the New York Stock Exchange (NYSE).
By the end of the decade, Tyco had a larger and more diverse corporation with sales topping $500 million and a net worth of nearly $140 million. Tyco’s success was largely attributed to ambitious acquisitions of Simplex Technology, Grinnell Fire Protection Systems, Armin Plastics and the Ludlow Corporation.
period through the 1970s, Tyco management focused the early 1980s on organizing its newly acquired subsidiaries. Tyco divided the company into three business segments (Fire Protection, Electronics, and Packaging), and implemented strategies to achieve significant market share in each of Tyco’s product lines.
Once organized, Tyco returned to the strategy of growth by acquisition in the later part of the decade acquiring Grinnell Corporation, Allied Tube and Conduit, and the Mueller Company. Tyco then again, reorganized its subsidiaries into four segments: Electrical and Electronic Components, Healthcare and Specialty Products, Fire and Security Services and Flow Control. This reorganization remained in place until 2007 when current CEO, Ed Breen, spun off the Electrical and Healthcare segments to create three publicly independent companies.
became CEO of Tyco International, and, for the next several years, the company again adopted an aggressive acquisition
strategy, eventually acquiring (by some accounts) over 1000 other companies between 1991 and 2001.
Major acquisitions in the 1990s included: Wormald International
Limited, Neotecha, Hindle/Winn, Classic Medical, Uni-Patch, Promeon, Preferred Pipe, Kendall International Co., Tectron Tube, Unistrut, Earth Technology Corporation, Professional Medical Products, Inc., Thorn Security, Carlisle, Watts Waterworks Businesses, Sempell, ElectroStar, American Pipe & Tube, Submarine Systems Inc., Keystone, INBRAND, Sherwood Davis & Geck, United States Surgical, Wells Fargo Alarm, AMP, Raychem, Glynwed, Temasa and Central Sprinkler designs.
To reflect Tyco’s global presence following the abundant acquisitions, the company’s name was changed from Tyco Laboratories, Inc. to Tyco International Ltd. in 1993. In addition, Tyco launched The Pipeline, an internal employee newsletter; the title was later changed to Tyco World. Its final issue was published in April–May 2006.
In 1996, Tyco was added to the Standard & Poor's S&P 500
Composite Index, which consists of the 500 publicly traded companies in the United States
with the largest market capitalization
.
In July 1997, Tyco merged by reverse takeover
with smaller publicly traded security services company named ADT Limited, controlled by Lord Ashcroft. Upon consummation of the merger, Tyco International Ltd. of Massachusetts became a wholly owned subsidiary of ADT Limited, and simultaneously ADT changed its name to Tyco International Ltd., retaining the former Tyco stock symbol, TYC. The merger moved Tyco’s incorporation
to Bermuda
, where it was headquartered in the colonial capital of Hamilton. A new subsidiary
named ADT Security Services
was also formed out of the merger.
In 1999 Tyco acquired two S&P 500
companies in a US$3 billion buyout; the electronics connector manufacturer AMP Inc. and a global leader in materials science, Raychem Corp.
In 2000, Tyco closed the year spinning off a deep-sea fiber-optic cable-laying division it had purchased from AT&T as Tyco Submarine Systems in a much anticipated initial public offering
.
In the fiscal 2001 year, Tyco acquired Mallinckrodt
Inc. and Simplex Time Recorder Company which it later merged in January 2002 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, the company's book value exceeded $110 billion. However, the company more than doubled its long-term debt, by over $80 billion.
In October 2001, the Engineered Products and Services segment acquired Century Tube Corp, and followed it by buying Water & Power Technologies in November 2001. The following November, the Tyco Electronics
segment acquired Transpower Technologies. The next month, the Plastics and Adhesives segment acquired LINQ Industrial Fabrics, Inc.
Later that month, Tyco’s acquisitions continued throughout all of its segments: the Electronics segment acquired Communications Instruments, Inc. The Healthcare segment bought Paragon Trade Brands. The Engineered Products and Services segment acquired Clean Air Systems. And the fire and Security segment of Tyco acquired SBC/Smith Alarm Systems, DSC Group, and Sensormatic Electronics Corp.
For all the acquisitions Tyco made in 2002, the company also incurred extensive losses. During the first quarter of 2002, following the recession of the previous year, the electronics segment recorded a charge of over $2 billion, related to massive overcapacity of fiber-optic cable, which in turn affected the in-process buildout of Tyco's global undersea fiber-optic network, known as Tyco Global Network (TGN). TGN generated a loss for fiscal 2002 of over $3 billion, with a restructuring charge of over $500 million. Construction of TGN was eventually completed in 2003.
The electronics segment also recorded over $1 billion in restructuring charges in 2002 from inventory write-down and facility closures. In addition, 2002 struck Tyco with two goodwill
impairments, the first for over $500 million in the second quarter, due to their fiber-cable overcapacity issue and other corporate problems. The second, costing the electronics segment $250 million related to sales issues in Power Systems, Electrical Contracting Services, and the Printed Circuit Group. To make Tyco’s financial matters worse, the company lost over a quarter of $1 billion in investment during 2002 in FLAG Telecom
Holdings Ltd.
In an effort to cut losses, 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
. It recorded the CIT divestment as discontinued operations for 2002, for a $6 billion loss, and as an almost $7 billion impairment charge. That month, the Tyco Healthcare segment also divested Surgical Dynamics, Inc.
For the year ended September 2002, Tyco revenue rose to nearly $35 billion. However, it suffered more than a $9 billion loss that year, which included the asset impairment write-down of TGN by over $3 billion, losses of nearly $2 billion for the two restructuring charges, and over $1 billion from the two goodwill impairment charges. In all, the net charges totaled nearly $7 billion of the loss that year. The stock price plummeted.
To add to the financial woes of the company, midway through the fiscal 2002 year, Tyco became embroiled in a massive scandal involving the excesses by its former chairman and CEO, L. Dennis Kozlowski
, and his senior management team. Kozlowski resigned and former Tyco CEO John F. Fort (Tyco) became interim CEO until the board of directors completed a search for a permanent replacement. As a consequence, on June 17, 2002, Tyco filed federal suit against Mark H. Swartz, Tyco's former executive vice president and chief corporate counsel, and Frank E. Walsh, a former director.
of Motorola
since his promotion at that company in January 2002.
Breen made an immediate impact on Tyco by gutting the existing board of directors and leadership team that worked with Kozlowski and replacing them with a new set of managers. One month after his appointment, Tyco announced the appointment of John Krol as lead director of the Board of Directors with the priority of improving Tyco's Corporate Governance
.
Breen made additional changes, appointing David FitzPatrick as Executive Vice President and CFO, William Lytton, Executive Vice President and General Counsel, and Eric Pillmore as Senior Vice President of Corporate Governance.
With a new management team in place, Tyco began a two phase internal investigation of former CEO Kozlowski. The investigation led to Tyco filing two federal law suits. On September 12 and December 6, 2002, Tyco filed a federal suit against Kozlowski and an arbitration claim against former CFO and director, Mark H. Swartz. Swartz, however, failed to submit to the American Arbitration Association and Tyco followed with a federal suit against him.
On November 27, 2002, the State of New Jersey
took action in the scandal, filing a federal suit against Tyco and former personnel, with charges in part of violating the New Jersey Racketeer Influenced and Corrupt Organizations Act
(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
. That March 31, Tyco made a motion to dismiss, which was granted in part over a year later, on October 14, 2004.
court granted in part Tyco's motion to dismiss.
Removed from the scandal, Tyco made internal moves within the company in 2003 forming its Plastics & Adhesives business segment, a former piece of the Healthcare & Specialty Products segment. Other changes came in Tyco’s corporate governance
: Tyco’s board re-elected John Krol as lead director, Tyco reorganized the assignments of the board’s committee, adopted a new board of governance principles and new Delegation of Authority policy which strengthened control over cash disbursements within the company.
The final improvement on corporate governance came in the Guide to Ethical Conduct. The guide was produced to 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 annual ethics statement.
Tyco also began a divestiture program following a review of its core businesses. Part of the plan was to sell TGN, which by then had been entirely written off in value. Agreement for the sale was reached in November.
In the second quarter of 2004, ADT Security sold off Sonitrol.
In all, within its divestiture program, by fiscal year end of 2004, Tyco had divested 21 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 $500 million that year.
By the end of 2004, Tyco employed under 260,000 people, with two-thirds outside the United States. Revenue was up strongly, to over $40 billion for the first time. Once again the strengthening euro against the dollar helped Tyco, accounting primarily for $1.5 billion of the increase in revenue. Various charges, losses, and debt repayment totaled nearly $1 billion in 2004, however profitability tripled that year to almost $3 billion.
acquired the Tyco Global Network (TGN) from Tyco International for $130 million. The chief stockholder in VSNL is India's Tata Group
, also one of India's largest conglomerates. It was once valued at $3 billion during the telecommunications bubble.
Tyco continued its divestiture program throughout 2005. The largest divestiture came in the announcement of a definitive agreement to sell its Plastics, Adhesives and Ludlow Coated Products businesses to an affiliate of private investment firm Apollo Management
, L.P. Tyco believed the segment no longer fit within the company's portfolio.
Tyco was awarded the largest statewide public safety communications project in the United States in 2004 when one of Tyco Electronics
’ businesses, M/A-COM, signed a contract to maintain New York's Statewide Wireless Network (SWN). The contract was worth approximately $2 billion and would last for 20 years.
Tyco also acquired two key companies to its Healthcare segment, Vivant Medical Inc. and Floréane Medical Implants.
The separation was completed in July 2007, when Tyco separated into three publicly independent companies:
Following the separation, Chairman and CEO Ed Breen remained at the head of Tyco International, which is now composed of five major business segments: ADT Worldwide, Fire Protection Services, Safety Products, Flow Control and Electrical and Metal Products. The company generated revenue of $18.8 billion in 2007 and employs 118,000 people across all 50 states and in more than 60 countries.
An official "Separation Management Team" was created to deal with all aspects of the separation and to make it as smooth as possible for customers, employees, and shareholders. Bob Scott was announced as its leader. Scott had joined Tyco in 2004.
On June 29, 2007, Tyco completed the share distribution separating the company into three wholly independent, publicly traded companies, each with its own board of directors, CEO, management staff, and financial structure.
The three new companies became:
Edward 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. That July 6, the new Tyco International issued a one-for-four reverse stock split.
On September 19, 2011, Tyco International Ltd. announced once again that the company would split into three businesses. ADT North America
, to be incorporated in the United States, would deal with residential security
. Other companies incorporated in countries other than the United States would cover flow control and commercial fire and security.
and former chief financial officer
Mark H. Swartz were accused of the theft of more than $150 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. Swartz received the same sentence. Then in May 2007, New Hampshire
Federal District Court Judge Paul Barbadoro approved a class action settlement whereby Tyco agreed to pay $2.92 billion (in conjunction with 225 million by PricewaterHouse Coopers, their auditors) to a class of defrauded shareholders represented by Grant & Eisenhofer P.A.
, Schiffrin, Barroway, Topaz & Kessler, and Milberg Weiss & Bershad.
Some of the many products made by Tyco include:
, Connecticut
, was sentenced on 12 counts of violationing the Clean Water Act
in August 2004. The plea agreement called for TPCG to pay a total of $10 million in fines. Of that amount, 6 million was paid as a federal criminal fine; $2.7 million went to the Connecticut Department of Environmental Protection
's (DEP) natural resources fund; the Towns of Stafford and Manchester received $500,000 each to fund improvements in their sewer
and water treatment
system; and $300,000 was paid for recycling
deionized and other wastewater
at the company's Stafford, Staffordville facilities. Between 1999 and June 2001, TPCG managers at the company's Stafford, Staffordville and Manchester facilities engaged in a variety of practices that caused the facilities to discharge wastewater with higher than permitted levels of pollutants into municipal sewage treatment systems. The illegal practices included, but were not limited to, diluting potentially non-compliant [wastewater samples, discarding samples with excessive levels of toxic metals, and omitting samples that were not in compliance for pH
. Daniel R. Callahan, the former Director of Environmental Health and Safety of Stafford
Division of Tyco Printed Circuit Group, pled guilty to violating the Clean Water Act
on November 17 of 2003. Callahan falsified reports submitted to the Connecticut Department of Environmental Protection (DEP). The reports failed to include the fact that a "batch tank" had been discharged into the Manchester public sewer system. Tyco's DEP permit required that all discharges into public sewer systems be reported. Tyco was 41st on the 2002 Political Economy Research Institute's (PERI) Toxic 100.
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
, with United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
operational headquarters in Princeton, New Jersey
Princeton, New Jersey
Princeton is a community located in Mercer County, New Jersey, United States. It is best known as the location of Princeton University, which has been sited in the community since 1756...
(Tyco International (US) Inc.). Tyco International is composed of three major business segments: Security Solutions, Fire Protection and Flow Control
Pipeline transport
Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
.
In June 2007, Tyco concluded a corporate separation that split the company into three publicly independent companies: Covidien Ltd. (formerly Tyco Healthcare), Tyco Electronics Ltd. (now TE Connectivity Ltd.) and Tyco International Ltd. (formerly Tyco Fire & Security and Tyco Engineered Products & Services (TFS/TEPS))
Tyco International announced in January 2010 that it is acquiring Brink's Home Security Holdings, (operating as Broadview Security) in a transaction valued at $2.0 billion.
It is reported that Broadview Security will merge into Tyco's ADT Security Services
ADT Security Services
ADT Security Services, originally American District Telegraph, now also known as simply ADT, is a division of Tyco International and a worldwide supplier of electronic security systems, fire alarm systems, communication systems, and integrated building management systems.-History:There were many...
division.
1960s
Founded by Arthur J. Gandua in 1960, Tyco, Inc. was formed as an investment and holding company with two segments: Tyco Semiconductors and The Materials Research Laboratory. In the first two years of operation, the company focused primarily on governmental research and military experiments in the private sector.In 1962, the business was incorporated in Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
and refocused on high-tech materials science and energy conservation products. Two years later in 1964, the company went public and began to fill gaps in its development and distribution network by acquiring Mule Battery Products, the first of Tyco’s 16 acquisitions in the next four years.
1970s
In 1974, Tyco was listed on the New York Stock Exchange (NYSE).
By the end of the decade, Tyco had a larger and more diverse corporation with sales topping $500 million and a net worth of nearly $140 million. Tyco’s success was largely attributed to ambitious acquisitions of Simplex Technology, Grinnell Fire Protection Systems, Armin Plastics and the Ludlow Corporation.
1980s
Following an aggressive acquisitionMergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
period through the 1970s, Tyco management focused the early 1980s on organizing its newly acquired subsidiaries. Tyco divided the company into three business segments (Fire Protection, Electronics, and Packaging), and implemented strategies to achieve significant market share in each of Tyco’s product lines.
Once organized, Tyco returned to the strategy of growth by acquisition in the later part of the decade acquiring Grinnell Corporation, Allied Tube and Conduit, and the Mueller Company. Tyco then again, reorganized its subsidiaries into four segments: Electrical and Electronic Components, Healthcare and Specialty Products, Fire and Security Services and Flow Control. This reorganization remained in place until 2007 when current CEO, Ed Breen, spun off the Electrical and Healthcare segments to create three publicly independent companies.
1990s
In 1992, Dennis KozlowskiDennis Kozlowski
Leonard Dennis Kozlowski is a former CEO of Tyco International, convicted in 2005 of crimes related to his receipt of $81 million in purportedly unauthorized bonuses, the purchase of art for $14.725 million and the payment by Tyco of a $20 million investment banking fee to Frank Walsh, a former...
became CEO of Tyco International, and, for the next several years, the company again adopted an aggressive acquisition
Mergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
strategy, eventually acquiring (by some accounts) over 1000 other companies between 1991 and 2001.
Major acquisitions in the 1990s included: Wormald International
Wormald International
Wormald International is a former Australian company that was bought out by Tyco International as of 1990.Joseph Wormald with partner Stanley Russell established Russell and Wormald business in 1889, which continued operating with this name until 1900. Wormald Brothers is formed in 1990 when Harry...
Limited, Neotecha, Hindle/Winn, Classic Medical, Uni-Patch, Promeon, Preferred Pipe, Kendall International Co., Tectron Tube, Unistrut, Earth Technology Corporation, Professional Medical Products, Inc., Thorn Security, Carlisle, Watts Waterworks Businesses, Sempell, ElectroStar, American Pipe & Tube, Submarine Systems Inc., Keystone, INBRAND, Sherwood Davis & Geck, United States Surgical, Wells Fargo Alarm, AMP, Raychem, Glynwed, Temasa and Central Sprinkler designs.
To reflect Tyco’s global presence following the abundant acquisitions, the company’s name was changed from Tyco Laboratories, Inc. to Tyco International Ltd. in 1993. In addition, Tyco launched The Pipeline, an internal employee newsletter; the title was later changed to Tyco World. Its final issue was published in April–May 2006.
In 1996, Tyco was added to the Standard & Poor's S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
Composite Index, which consists of the 500 publicly traded companies in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
with the largest market capitalization
Capitalization
Capitalization is writing a word with its first letter as a majuscule and the remaining letters in minuscules . This of course only applies to those writing systems which have a case distinction...
.
In July 1997, Tyco merged by reverse takeover
Reverse takeover
A reverse takeover or reverse merger is the acquisition of a public company by a private company so that the private company can bypass the lengthy and complex process of going public...
with smaller publicly traded security services company named ADT Limited, controlled by Lord Ashcroft. Upon consummation of the merger, Tyco International Ltd. of Massachusetts became a wholly owned subsidiary of ADT Limited, and simultaneously ADT changed its name to Tyco International Ltd., retaining the former Tyco stock symbol, TYC. The merger moved Tyco’s incorporation
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
to Bermuda
Bermuda
Bermuda is a British overseas territory in the North Atlantic Ocean. Located off the east coast of the United States, its nearest landmass is Cape Hatteras, North Carolina, about to the west-northwest. It is about south of Halifax, Nova Scotia, Canada, and northeast of Miami, Florida...
, where it was headquartered in the colonial capital of Hamilton. A new subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
named ADT Security Services
ADT Security Services
ADT Security Services, originally American District Telegraph, now also known as simply ADT, is a division of Tyco International and a worldwide supplier of electronic security systems, fire alarm systems, communication systems, and integrated building management systems.-History:There were many...
was also formed out of the merger.
In 1999 Tyco acquired two S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
companies in a US$3 billion buyout; the electronics connector manufacturer AMP Inc. and a global leader in materials science, Raychem Corp.
In 2000, Tyco closed the year spinning off a deep-sea fiber-optic cable-laying division it had purchased from AT&T as Tyco Submarine Systems in a much anticipated initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
.
2000-2001
Tyco’s aggressive acquisition strategy continued into the early 2000s, with the purchases of General Surgical Innovations, Siemens Electrochemical Components, AFC Cable and Praegitzer. The additions gave Tyco an ending fiscal 2000 year revenue exceeding $28 billion, near $2 billion coming from the sale by a subsidiary of its common shares.In the fiscal 2001 year, Tyco acquired Mallinckrodt
Mallinckrodt
Mallinckrodt is a set of pharmaceutical, chemical, imaging, and respiratory equipment suppliers based in the St. Louis, Missouri, area. Founded in 1867 when the Mallinckrodt brothers formed G. Mallinckrodt & Company to manufacture pharmaceutical chemicals, Mallinckrodt was purchased by Tyco...
Inc. and Simplex Time Recorder Company which it later merged in January 2002 with Grinnell Fire Protection to form an indirect wholly owned subsidiary, SimplexGrinnell
SimplexGrinnell
SimplexGrinnell, a subsidiary of Tyco International, is an American company specializing in active fire protection systems, communication systems and testing, inspection and maintenance services...
LP, the world's largest fire protection company. For the year ended September 2001, the company's book value exceeded $110 billion. However, the company more than doubled its long-term debt, by over $80 billion.
In October 2001, the Engineered Products and Services segment acquired Century Tube Corp, and followed it by buying Water & Power Technologies in November 2001. The following November, the Tyco Electronics
Tyco Electronics
TE Connectivity, Ltd., previously known as Tyco Electronics, Ltd., and formerly a segment of Tyco International, is a leading global provider of engineered electronic components, network solutions, undersea telecommunication systems, and specialty products for customers in more than 150 countries...
segment acquired Transpower Technologies. The next month, the Plastics and Adhesives segment acquired LINQ Industrial Fabrics, Inc.
Early 2002
With complexity growing within Tyco’s subsidiaries, in January 2002, Tyco announced a plan to split the business into four separate companies. However, this plan was abandoned after a downgrade in its credit rating and a significant drop in its stock price.Later that month, Tyco’s acquisitions continued throughout all of its segments: the Electronics segment acquired Communications Instruments, Inc. The Healthcare segment bought Paragon Trade Brands. The Engineered Products and Services segment acquired Clean Air Systems. And the fire and Security segment of Tyco acquired SBC/Smith Alarm Systems, DSC Group, and Sensormatic Electronics Corp.
For all the acquisitions Tyco made in 2002, the company also incurred extensive losses. During the first quarter of 2002, following the recession of the previous year, the electronics segment recorded a charge of over $2 billion, related to massive overcapacity of fiber-optic cable, which in turn affected the in-process buildout of Tyco's global undersea fiber-optic network, known as Tyco Global Network (TGN). TGN generated a loss for fiscal 2002 of over $3 billion, with a restructuring charge of over $500 million. Construction of TGN was eventually completed in 2003.
The electronics segment also recorded over $1 billion in restructuring charges in 2002 from inventory write-down and facility closures. In addition, 2002 struck Tyco with two goodwill
Goodwill (accounting)
Goodwill is an accounting concept meaning the value of an entity over and above the value of its assets. The term was originally used in accounting to express the intangible but quantifiable "prudent value" of an ongoing business beyond its assets, resulting perhaps because the reputation the firm...
impairments, the first for over $500 million in the second quarter, due to their fiber-cable overcapacity issue and other corporate problems. The second, costing the electronics segment $250 million related to sales issues in Power Systems, Electrical Contracting Services, and the Printed Circuit Group. To make Tyco’s financial matters worse, the company lost over a quarter of $1 billion in investment during 2002 in FLAG Telecom
Flag Telecom
Reliance Globalcom is a division of Reliance Communications, an Indian integrated telecommunications service provider. Reliance Globalcom provides global managed network solutions and services, and has network management capability in partnership with carrier partners...
Holdings Ltd.
In an effort to cut losses, 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
CIT Group Incorporated
CIT Group Inc. is a United States bank holding company founded in 1908 with more than $35 billion in finance and leasing assets. It provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries...
. It recorded the CIT divestment as discontinued operations for 2002, for a $6 billion loss, and as an almost $7 billion impairment charge. That month, the Tyco Healthcare segment also divested Surgical Dynamics, Inc.
For the year ended September 2002, Tyco revenue rose to nearly $35 billion. However, it suffered more than a $9 billion loss that year, which included the asset impairment write-down of TGN by over $3 billion, losses of nearly $2 billion for the two restructuring charges, and over $1 billion from the two goodwill impairment charges. In all, the net charges totaled nearly $7 billion of the loss that year. The stock price plummeted.
To add to the financial woes of the company, midway through the fiscal 2002 year, Tyco became embroiled in a massive scandal involving the excesses by its former chairman and CEO, L. Dennis Kozlowski
Dennis Kozlowski
Leonard Dennis Kozlowski is a former CEO of Tyco International, convicted in 2005 of crimes related to his receipt of $81 million in purportedly unauthorized bonuses, the purchase of art for $14.725 million and the payment by Tyco of a $20 million investment banking fee to Frank Walsh, a former...
, and his senior management team. Kozlowski resigned and former Tyco CEO John F. Fort (Tyco) became interim CEO until the board of directors completed a search for a permanent replacement. As a consequence, on June 17, 2002, Tyco filed federal suit against Mark H. Swartz, Tyco's former executive vice president and chief corporate counsel, and Frank E. Walsh, a former director.
Late 2002
In July 2002, Edward D. Breen was appointed president, CEO, and chairman of Tyco for an initial three-year term. Breen had previously been president and COOChief operating officer
A Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...
of Motorola
Motorola
Motorola, Inc. was an American multinational telecommunications company based in Schaumburg, Illinois, which was eventually divided into two independent public companies, Motorola Mobility and Motorola Solutions on January 4, 2011, after losing $4.3 billion from 2007 to 2009...
since his promotion at that company in January 2002.
Breen made an immediate impact on Tyco by gutting the existing board of directors and leadership team that worked with Kozlowski and replacing them with a new set of managers. One month after his appointment, Tyco announced the appointment of John Krol as lead director of the Board of Directors with the priority of improving Tyco's Corporate Governance
Corporate governance
Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...
.
Breen made additional changes, appointing David FitzPatrick as Executive Vice President and CFO, William Lytton, Executive Vice President and General Counsel, and Eric Pillmore as Senior Vice President of Corporate Governance.
With a new management team in place, Tyco began a two phase internal investigation of former CEO Kozlowski. The investigation led to Tyco filing two federal law suits. On September 12 and December 6, 2002, Tyco filed a federal suit against Kozlowski and an arbitration claim against former CFO and director, Mark H. Swartz. Swartz, however, failed to submit to the American Arbitration Association and Tyco followed with a federal suit against him.
On November 27, 2002, the State of New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
took action in the scandal, filing a federal suit against Tyco and former personnel, with charges in part of violating the New Jersey Racketeer Influenced and Corrupt Organizations Act
Racketeer Influenced and Corrupt Organizations Act
The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization...
(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
United States District Court for the District of New Hampshire
The United States District Court for the District of New Hampshire is the Federal district court whose jurisdiction comprises the state of New Hampshire. The Warren B. Rudman U.S...
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
Securities Act of 1933
Congress enacted the Securities Act of 1933 , in the aftermath of the stock market crash of 1929 and during the ensuing Great Depression...
and the Securities Exchange Act of 1934
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 , , codified at et seq., is a law governing the secondary trading of securities in the United States of America. It was a sweeping piece of legislation...
. That March 31, Tyco made a motion to dismiss, which was granted in part over a year later, on October 14, 2004.
2003
On February 3, 2003, the scandal continued to play out in the courts, Tyco and more personnel were again 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 HampshireNew Hampshire
New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...
court granted in part Tyco's motion to dismiss.
Removed from the scandal, Tyco made internal moves within the company in 2003 forming its Plastics & Adhesives business segment, a former piece of the Healthcare & Specialty Products segment. Other changes came in Tyco’s corporate governance
Corporate governance
Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...
: Tyco’s board re-elected John Krol as lead director, Tyco reorganized the assignments of the board’s committee, adopted a new board of governance principles and new Delegation of Authority policy which strengthened control over cash disbursements within the company.
The final improvement on corporate governance came in the Guide to Ethical Conduct. The guide was produced to 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 annual ethics statement.
2004
In an effort to enhance consumer awareness and revive corporate image, in June 2004, Tyco launched a new global print-advertising campaign, “Tyco a vital part of your world.”Tyco also began a divestiture program following a review of its core businesses. Part of the plan was to sell TGN, which by then had been entirely written off in value. Agreement for the sale was reached in November.
In the second quarter of 2004, ADT Security sold off Sonitrol.
In all, within its divestiture program, by fiscal year end of 2004, Tyco had divested 21 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 $500 million that year.
By the end of 2004, Tyco employed under 260,000 people, with two-thirds outside the United States. Revenue was up strongly, to over $40 billion for the first time. Once again the strengthening euro against the dollar helped Tyco, accounting primarily for $1.5 billion of the increase in revenue. Various charges, losses, and debt repayment totaled nearly $1 billion in 2004, however profitability tripled that year to almost $3 billion.
2005
Videsh Sanchar Nigam Limited (VSNL), IndiaIndia
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
acquired the Tyco Global Network (TGN) from Tyco International for $130 million. The chief stockholder in VSNL is India's Tata Group
Tata Group
Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India. Tata Group is one of the largest companies in India by market capitalization and revenue. It has interests in communications and information technology, engineering, materials, services, energy,...
, also one of India's largest conglomerates. It was once valued at $3 billion during the telecommunications bubble.
Tyco continued its divestiture program throughout 2005. The largest divestiture came in the announcement of a definitive agreement to sell its Plastics, Adhesives and Ludlow Coated Products businesses to an affiliate of private investment firm Apollo Management
Apollo Management
Apollo Global Management, LLC is a private equity investment firm, founded in 1990 by former Drexel Burnham Lambert banker Leon Black. The firm specializes in leveraged buyout transactions and purchases of distressed securities involving corporate restructuring, special situations and industry...
, L.P. Tyco believed the segment no longer fit within the company's portfolio.
Tyco was awarded the largest statewide public safety communications project in the United States in 2004 when one of Tyco Electronics
Tyco Electronics
TE Connectivity, Ltd., previously known as Tyco Electronics, Ltd., and formerly a segment of Tyco International, is a leading global provider of engineered electronic components, network solutions, undersea telecommunication systems, and specialty products for customers in more than 150 countries...
’ businesses, M/A-COM, signed a contract to maintain New York's Statewide Wireless Network (SWN). The contract was worth approximately $2 billion and would last for 20 years.
Tyco also acquired two key companies to its Healthcare segment, Vivant Medical Inc. and Floréane Medical Implants.
2006-2007
By the end of the fiscal year 2006, Tyco’s revenue had eclipsed $17 Billion. Despite the strong cash flow, growing revenue and decreased debt, Tyco and its Board of Directors approved a plan to separate Tyco into three publicly independent companies. Tyco believed that this would allow for each segment to perform better within its particular market and create more value for its shareholders.The separation was completed in July 2007, when Tyco separated into three publicly independent companies:
- Covidien Ltd. (formerly Tyco Healthcare)
- Tyco Electronics Ltd. (now TE Connectivity)
- Tyco International Ltd. (formerly Tyco Fire & Security and Tyco Engineered Products & Services (TFS/TEPS))
Following the separation, Chairman and CEO Ed Breen remained at the head of Tyco International, which is now composed of five major business segments: ADT Worldwide, Fire Protection Services, Safety Products, Flow Control and Electrical and Metal Products. The company generated revenue of $18.8 billion in 2007 and employs 118,000 people across all 50 states and in more than 60 countries.
Company separations
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 possible for customers, employees, and shareholders. Bob Scott was announced as its leader. Scott had joined Tyco in 2004.
On June 29, 2007, Tyco completed the share distribution separating the company into three wholly independent, publicly traded companies, each with its own board of directors, CEO, management staff, and financial structure.
The three new companies became:
- Covidien Ltd., formerly Tyco Healthcare
- Tyco Electronics Ltd., now TE Connectivity
- Tyco International Ltd., formerly Tyco Fire & Security and Tyco Engineered Products & Services (TFS/TEPS)
Edward 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. That July 6, the new Tyco International issued a one-for-four reverse stock split.
On September 19, 2011, Tyco International Ltd. announced once again that the company would split into three businesses. ADT North America
ADT Security Services
ADT Security Services, originally American District Telegraph, now also known as simply ADT, is a division of Tyco International and a worldwide supplier of electronic security systems, fire alarm systems, communication systems, and integrated building management systems.-History:There were many...
, to be incorporated in the United States, would deal with residential security
Burglar alarm
Burglar , alarms are systems designed to detect unauthorized entry into a building or area. They consist of an array of sensors, a control panel and alerting system, and interconnections...
. Other companies incorporated in countries other than the United States would cover flow control and commercial fire and security.
Corporate scandal of 2002
Former chairman and chief executive Dennis KozlowskiDennis Kozlowski
Leonard Dennis Kozlowski is a former CEO of Tyco International, convicted in 2005 of crimes related to his receipt of $81 million in purportedly unauthorized bonuses, the purchase of art for $14.725 million and the payment by Tyco of a $20 million investment banking fee to Frank Walsh, a former...
and former chief financial officer
Chief financial officer
The chief financial officer or Chief financial and operating officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management...
Mark H. Swartz were accused of the theft of more than $150 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
A-ok
An A-OK is both a saying, derived from okay, and a hand-gesture done by connecting the thumb and forefinger in to a circle , and holding the other fingers straight or relaxed in the air.Unicode symbol U+1F44C represents this gesture....
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. Swartz received the same sentence. Then in May 2007, New Hampshire
New Hampshire
New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...
Federal District Court Judge Paul Barbadoro approved a class action settlement whereby Tyco agreed to pay $2.92 billion (in conjunction with 225 million by PricewaterHouse Coopers, their auditors) to a class of defrauded shareholders represented by Grant & Eisenhofer P.A.
Grant & Eisenhofer P.A.
Grant & Eisenhofer is an international boutique law firm with a focus on securities and complex litigation, corporate governance, false claims/wage and hour litigation, and portfolio monitoring. Stuart M. Grant and Jay W. Eisenhofer founded the primary office in Wilmington, Delaware in 1997...
, Schiffrin, Barroway, Topaz & Kessler, and Milberg Weiss & Bershad.
Net revenues by year
| Year | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (in US$B) | $18.8* | $41.0 | $39.3 | $38.0 | $36.8 | $35.6 | $34.0 | $28.9 | $22.5 | $19.1 | $6.6 |
- *Denotes the year of Tyco's separation into three publicly independent companies.
Products
- Fire alarm systemFire alarm systemAn automatic fire alarm system is designed to detect the unwanted presence of fire by monitoring environmental changes associated with combustion. In general, a fire alarm system is classified as either automatically actuated, manually actuated, or both...
s (Simplex, ADT) - Fire-fighting hardware and Fire-fighting foam concentrates (AnsulAnsulAnsul Fire School is a fire school which was founded in 1940 and is located in Marinette, Wisconsin, United States. It trains students with classroom and field instruction, with emphasis on hands-on firefighting....
, Skum, Total Walther, and Sabo) - Circuit protection devices
- EngineeringEngineeringEngineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...
services - Fire sprinklerFire sprinklerA fire sprinkler system is an active fire protection measure, consisting of a water supply system, providing adequate pressure and flowrate to a water distribution piping system, onto which fire sprinklers are connected...
s (SimplexGrinnellSimplexGrinnellSimplexGrinnell, a subsidiary of Tyco International, is an American company specializing in active fire protection systems, communication systems and testing, inspection and maintenance services...
, Wormald) - Security systems (ADTADT Security ServicesADT Security Services, originally American District Telegraph, now also known as simply ADT, is a division of Tyco International and a worldwide supplier of electronic security systems, fire alarm systems, communication systems, and integrated building management systems.-History:There were many...
, DSC) - GRINNELL Grooved ProductsGrinnell Grooved ProductsGrinnell Mechanical Products, a brand of Tyco International Ltd., manufactures grooved piping and mechanical products. Grinnell Mechanical Products specializes in mechanical, fire, HVAC, commercial, mining, institutional and industrial applications...
- 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 (SensormaticSensormaticSensormatic, currently known as Tyco Fire & Security, is in the business of the manufacture and sale of electronic article surveillance equipment. Sensormatic Electronics Corporation was purchased by Tyco International Ltd. in 2001. The acquisition was executed by a merger of Sensormatic with a...
) - CCTV/Access Control Equipment (ADT, American Dynamics, Kantech, Software House, CEM Systems)
Environmental record
Tyco Printed Circuit Group (TPCG) of StamfordStamford, Connecticut
Stamford is a city in Fairfield County, Connecticut, United States. According to the 2010 census, the population of the city is 122,643, making it the fourth largest city in the state and the eighth largest city in New England...
, Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
, was sentenced on 12 counts of violationing the Clean Water Act
Clean Water Act
The Clean Water Act is the primary federal law in the United States governing water pollution. Commonly abbreviated as the CWA, the act established the goals of eliminating releases of high amounts of toxic substances into water, eliminating additional water pollution by 1985, and ensuring that...
in August 2004. The plea agreement called for TPCG to pay a total of $10 million in fines. Of that amount, 6 million was paid as a federal criminal fine; $2.7 million went to the Connecticut Department of Environmental Protection
Department of Environmental Protection
Department of Environmental Protection is a name used by several states in the United States of America for the agency charged with proposing and enforcing environmental law...
's (DEP) natural resources fund; the Towns of Stafford and Manchester received $500,000 each to fund improvements in their sewer
Sanitary sewer
A sanitary sewer is a separate underground carriage system specifically for transporting sewage from houses and commercial buildings to treatment or disposal. Sanitary sewers serving industrial areas also carry industrial wastewater...
and water treatment
Water treatment
Water treatment describes those processes used to make water more acceptable for a desired end-use. These can include use as drinking water, industrial processes, medical and many other uses. The goal of all water treatment process is to remove existing contaminants in the water, or reduce the...
system; and $300,000 was paid for recycling
Recycling
Recycling is processing used materials into new products to prevent waste of potentially useful materials, reduce the consumption of fresh raw materials, reduce energy usage, reduce air pollution and water pollution by reducing the need for "conventional" waste disposal, and lower greenhouse...
deionized and other wastewater
Wastewater
Wastewater is any water that has been adversely affected in quality by anthropogenic influence. It comprises liquid waste discharged by domestic residences, commercial properties, industry, and/or agriculture and can encompass a wide range of potential contaminants and concentrations...
at the company's Stafford, Staffordville facilities. Between 1999 and June 2001, TPCG managers at the company's Stafford, Staffordville and Manchester facilities engaged in a variety of practices that caused the facilities to discharge wastewater with higher than permitted levels of pollutants into municipal sewage treatment systems. The illegal practices included, but were not limited to, diluting potentially non-compliant [wastewater samples, discarding samples with excessive levels of toxic metals, and omitting samples that were not in compliance for pH
PH
In chemistry, pH is a measure of the acidity or basicity of an aqueous solution. Pure water is said to be neutral, with a pH close to 7.0 at . Solutions with a pH less than 7 are said to be acidic and solutions with a pH greater than 7 are basic or alkaline...
. Daniel R. Callahan, the former Director of Environmental Health and Safety of Stafford
Stafford
Stafford is the county town of Staffordshire, in the West Midlands region of England. It lies approximately north of Wolverhampton and south of Stoke-on-Trent, adjacent to the M6 motorway Junction 13 to Junction 14...
Division of Tyco Printed Circuit Group, pled guilty to violating the Clean Water Act
Clean Water Act
The Clean Water Act is the primary federal law in the United States governing water pollution. Commonly abbreviated as the CWA, the act established the goals of eliminating releases of high amounts of toxic substances into water, eliminating additional water pollution by 1985, and ensuring that...
on November 17 of 2003. Callahan falsified reports submitted to the Connecticut Department of Environmental Protection (DEP). The reports failed to include the fact that a "batch tank" had been discharged into the Manchester public sewer system. Tyco's DEP permit required that all discharges into public sewer systems be reported. Tyco was 41st on the 2002 Political Economy Research Institute's (PERI) Toxic 100.
External links
- Tyco International official website
- Tyco Telecommunications website
- Tyco Healthcare
- Tyco Fire & Security
- Tyco Federal Credit Union
- http://www.grinnell.com
Data
- Yahoo! - Tyco International Ltd. Company Profile
- Tyco International Company Profile and News Archive