NEUHAUSEN, Switzerland,
March 3, 2014 /PRNewswire/
-- Tyco (NYSE: TYC) today announced that it has signed a
definitive agreement to sell Tyco
Fire & Security Services Korea Co. Ltd. and its
subsidiaries (ADT Caps Co., Ltd., Capstec Co., Ltd. and ADT
Security Co., Ltd.) that form and operate the Company's South
Korean security business ("ADT Korea") to The Carlyle Group
(NASDAQ: CG), in a cash transaction valued at approximately
$1.93 billion. The transaction
is expected to close in Tyco's fiscal third quarter of 2014,
subject to customary closing conditions including required
regulatory approval.
ADT Korea is a leading provider of advanced security solutions
in South Korea, serving
approximately 475,000 small-and-medium-sized businesses, commercial
and residential customers. The business provides central
monitoring services, with video surveillance and dispatch, access
control and other customized security solutions as well as guarding
services. The business is headquartered in Seoul, South Korea, with approximately 7,500
employees and a nationwide network that includes 69
branches.
"We are pleased to announce the sale of ADT Korea in a
transaction that provides value to our shareholders," said
George Oliver, Tyco's Chief
Executive Officer. "While ADT Korea is healthy and
profitable, this transaction represented a unique opportunity to
realize the value generated in the business over time and redeploy
it to further enhance our portfolio and maximize shareholder value.
We continue to execute on our three year strategy which positions
us to deliver a 15% earnings per share CAGR in fiscal 2015."
"ADT Korea is a leader in the South Korean market, with a strong
management team and highly dedicated employees. We thank them for
their contributions to Tyco and know they will continue to thrive
within The Carlyle Group."
Tyco's net cash proceeds from the transaction are expected to be
$1.85 billion. The proceeds will
allow Tyco to increase cash deployed for earnings-accretive
activities, such as strategic acquisitions, share repurchases and
organic growth initiatives, as well as other corporate
purposes.
Financial Highlights:
For fiscal 2014, ADT Korea is
expected to generate revenue and operating income of approximately
$600 million and $125 million, respectively, with an EBITDA margin
of approximately 30%, contributing annual earnings per share
("EPS") to Tyco of approximately $0.20. Tyco's financials will be re-cast to
report this business as a discontinued operation.
As a result of the transaction, the Company expects that
approximately $0.05 of EPS in the
second fiscal quarter will now be reflected in discontinued
operations. Therefore, the Company is updating its EPS
guidance solely for this reclassification. The Company now
expects EPS from continuing operations before special items for the
second fiscal quarter to be in the range of $0.39 to $0.41 compared to original guidance of
$0.44 to $0.46. The Company
will provide an update on full year guidance during the quarterly
earnings call to be held in April.
Morgan Stanley acted as Tyco's financial advisor in connection
with this transaction, and Simpson Thacher & Bartlett LLP and
Kim & Chang acted as legal counsel.
Additional information regarding the transaction can be found in
a summary presentation in the Investor Relations section of Tyco's
website at http://investors.tyco.com.
ABOUT TYCO
Tyco (NYSE: TYC) is the world's largest pure-play fire
protection and security company. Tyco provides more than three
million customers around the globe with the latest fire protection
and security products and services. A company with $10+ billion in
annual revenue, Tyco has over 65,000 employees in more than 1,000
locations across 50 countries serving various end markets,
including commercial, institutional, governmental, retail,
industrial, energy, residential and small business. For more
information, visit www.tyco.com.
FORWARD-LOOKING STATEMENTS
This press release contains a number of forward-looking
statements. In many cases forward-looking statements are identified
by words, and variations of words, such as "anticipate",
"estimate", "believe", "continue", "could", "intend", "may",
"plan", "potential", "predict", "positioned", "should", "will",
"expect", "objective", "projection", "forecast", "goal",
"guidance", "outlook", "effort", "target", and other similar words.
However, the absence of these words does not mean the statements
are not forward-looking. Examples of forward-looking statements
include, but are not limited to, revenue, operating margin and
other financial projections, statements regarding the health and
growth prospects of the industries and end markets in which Tyco
operates, the leadership, resources, potential, priorities, and
opportunities for Tyco in the future, statements regarding Tyco's
credit profile, capital allocation priorities, capital market
related activities, and Tyco's acquisition, divestiture,
restructuring and other productivity initiatives. The
forward-looking statements in this press release are based on
current expectations and assumptions that are subject to risks and
uncertainties, many of which are outside of our control, and could
cause results to materially differ from expectations. Such risks
and uncertainties include, but are not limited to: economic,
business, competitive, technological or regulatory factors that
adversely impact Tyco or the markets and industries in which it
competes; market fluctuations that impact Tyco's capital market and
portfolio activities, unanticipated expenses such as environmental,
litigation or legal settlement expenses; tax law changes; and
industry specific events or conditions that may adversely impact
revenue or other financial projections. Actual results could differ
materially from anticipated results. Tyco is under no obligation
(and expressly disclaims any obligation) to update its
forward-looking statements. More detailed information about these
and other factors is set forth in Tyco's Annual Report on
Form 10-K for the fiscal year ended Sept. 27, 2013 and in subsequent filings with the
Securities and Exchange Commission.
SOURCE Tyco