Tyco International Ltd. (TYC) is getting ready to go from one business to three separate businesses in order to unlock the value of its subsidiaries.
- The crown jewel of Tyco is ADT (ADT). ADT is the “leading provider of electronic security, interactive home and business automation and related monitoring services”.
- The other spinoff will be Tyco Flow Control. Flow Control “designs, manufactures, sells and services valves, pipes, fittings, automation and controls, valve automation and heat tracing products for general process, energy and mining markets as well as the water and wastewater markets.” Immediately after the spinoff, Flow Control will merge with Pentair, Inc. (PNR) with Pentair surviving the merger.
- What will remain of Tyco after the two aforementioned spinoffs is the Tyco Fire Protection business. “Tyco Fire Protection designs, manufactures, sells, installs and services fire detection and fire suppression systems and building and life safety products for commercial, industrial and governmental customers.” It will still trade under they symbol TYC.
On this Friday, September 28, each Tyco shareholder will receive:
- One ADT share for every two Tyco shares.
- Approximately .24 shares of Flow Control shares for every Tyco share. After the merger with PNR, for each share of Flow Control, investors will receive one share of PNR. After the merger, “Tyco shareholders as of the record date will own approximately 52.5% of the common shares of Pentair Ltd. on a fully-diluted basis (excluding treasury shares).”
HypeZero will analyze the spinoff in detail in the next article.
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Disclosure: I do not own shares of TYC.