Tyco to sell 51 percent stake to Clayton Dubilier for $720 million

[News_Editor]

Tyco to sell 51 percent stake to Clayton Dubilier for $720 million

2010-11-09 22:35:45 GMT+7 (ICT)

SCHAFFHAUSEN, SWITZERLAND (BNO NEWS) -- Tyco International Ltd. on Tuesday announced that it has entered into an agreement to sell a 51 percent stake in its Electrical and Metal Products business to the private equity firm Clayton Dubilier & Rice, LLC for approximately $720 million.

Tyco said it would use these proceeds to accelerate share repurchases under a $1 billion program announced by the company on September 8.

The Electrical and Metal Products business will operate as a standalone entity under the name Atkore International. Following the transaction, Tyco's ownership interest in Atkore will be accounted for under the equity method of accounting.

A CD&R-managed fund will contribute $306 million for a 51 percent preferred interest and Atkore will obtain $465 million in third-party financing.In addition, Tyco will recognize a gain on the transaction of approximately $200 million with a minimal tax liability.

Atkore results for the fiscal first quarter of 2011 will continue to be reported in Tyco's operating income.

"This transaction is attractive for both Tyco and Atkore," said Ed Breen, Chairman and Chief Executive Officer of Tyco.

"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 is expected to close in the December-January time frame, but it is subject to the satisfaction of customary closing conditions.

The Electrical & Metal Products business designs, manufactures and sells galvanized steel tubes and pipes, electrical conduit, armored wire and cable, metal framing systems and building components.

The business serves a wide range of construction, electrical, fire, security, and mechanical applications and generated revenue of $1.4 billion in 2010.

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