Tyco International
Tyco International was a security systems company incorporated in Ireland, with operational headquarters in Princeton, New Jersey, United States. Tyco International was composed of two major business segments: security solutions and fire protection.
On January 25, 2016, Johnson Controls announced it would merge with Tyco, and all businesses of Tyco and Johnson Controls would be combined under Tyco International plc, to be renamed as Johnson Controls International plc. The merger was completed on September 9, 2016.
Timeline
1960s
Founded by Arthur J. Rosenberg 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 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 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.
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 aggressive acquisition 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 Kozlowski became CEO of Tyco International, and, for the next several years, the company again adopted an aggressive acquisition strategy, eventually acquiring over 3,000 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 1997, Tyco acquired AT&T Submarine Systems, gaining research and development and fleet assets, along with the manufacturing capability to produce repeaters and transmission equipment. These additional capabilities, combined with cable manufacturing at Tyco Integrated Cables Systems in Newington, New Hampshire, established Tyco Telecommunications as the world's first vertically integrated global optical network supplier, capable of developing the technology and manufacturing the components, to designing, building and maintaining systems.
In July 1997, Tyco merged by reverse takeover with a smaller publicly traded security services company named ADT Limited, controlled by Michael Ashcroft. As part of the deal, 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, a tax haven, where it was headquartered in the colonial capital of Hamilton. A new subsidiary named ADT Security Systems was also formed out of the merger, and later changed its name to ADT Security Services.
In 1999, Tyco acquired two S&P 500 companies in a buyout. They acquired the electronics connector manufacturer AMP Inc., for $12.22 billion and a materials science company, Raychem Corp., for $1.4 billion.
2000s
2000–2001
Tyco's aggressive acquisition strategy continued into the early 2000s, with the purchases of General Surgical Innovations, Siemens Electromechanical Components, AFC Cable and Praegitzer. The additions gave Tyco an ending fiscal 2000 year revenue exceeding $28 billion, nearly $2 billion coming from the sale by a subsidiary of its common shares.In the fiscal 2000 year, Tyco acquired Mallinckrodt Inc, a subsidiary of United States Surgical Corporation and Simplex Time Recorder Company which it 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 2000, the company's book value exceeded $141 billion. However, the company more than doubled its long-term debt, by over $80 billion. "Mallinckrodt US LLC, is completely separate from Mallinckrodt Pharmaceuticals. Mallinckrodt US LLC is a subsidiary of United States Surgical Corporation, and an affiliate of Medtronic plc, the ultimate parent company of both entities".
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.
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, a manufacturer of private label diapers for retailers such as Walmart, Kmart, Albertsons, CVS. 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 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. It recorded the CIT divestment as discontinued operations for 2002, taking 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 became interim CEO until the board of directors completed a search for a permanent replacement. Early 2002, Tyco was alleged in violation of the Securities Exchange Act of 1934 by nondisclosure of major financial information and artificially inflating its earnings. 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.