Monday, July 12, 2010

Tyco Electronics to Acquire ADC for $1.25 Billion

Tyco Electronics agreed to acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The deal will position Tyco Electronics' Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks. ADC's connectivity product portfolio provides end-to-end network infrastructure solutions for central office, data center, outside plant and wireless network and cell-site deployments. Tyco Electronics' Network Solutions group supplies infrastructure components and systems for the communication service provider, building networks and energy markets, including connectors, above- and below-ground enclosures, heat shrink sleeves, cable accessories, surge arrestors, fiber optic cabling, copper cabling and racks for copper and fiber networks. The company is also a leader in developing, manufacturing, installing and maintaining advanced fiber optic undersea networks.

The combined organization will offer a connectivity product portfolio for both wireless and wireline network operators. In addition to extended geographic reach, the deal will provide Tyco with ADC's Distributed Antenna System (DAS) products, which extend mobile network coverage into commercial buildings. Additionally, Tyco Electronics will add ADC's professional services organization in the US to its business.

ADC reported FY 2009 annual sales of $1.15 billion. Approximately 35% of the company's sales are international. The company has 9,000 employees and is headquartered in Minneapolis, Minn.

In addition, Tyco Electronics reported preliminary results for the fiscal third quarter ended June 25, 2010. The company reported sales of $3.1 billion, an increase of 23 percent over the prior year quarter and up 4 percent sequentially. GAAP EPS were $0.72 in the quarter which included $0.02 per share of income related to other items net of restructuring charges. Adjusted EPS were $0.70 in the quarter. The company's book-to-bill ratio was 1.06 for the quarter and 1.08 excluding Subsea Communications.

  • In May 2009, Tyco Electronics acquired the assets of Zarlink Semiconductor's Optical Products for approximately US$15 million in cash.

  • ADC was founded in 1935 by Ralph Allison to build audio products as well as amplifiers and transformers for the broadcast industry.


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