Tyco Expands Investment in Middle East Business
Tyco has announced that it has made an additional investment in its Tyco UAE joint venture with local partner Suwaidi Engineering Group
Separately the firm has reached a definitive agreement to sell its fire detection and protection business in Australia to Evergreen Capital, L.P.
Tyco UAE is a leading provider of fire, security and integrated solutions and services in the UAE and also has operations in Qatar and Oman, serving customers in the oil and gas, transportation, banking, commercial and other sectors in the region.
“The Middle East represents an attractive opportunity for growth for Tyco,” said Tyco Chief Executive Officer George R. Oliver. “This expanded investment will allow the joint venture to fully leverage Tyco’s product portfolio, service capabilities and global account base to enhance the solutions it offers customers throughout the Middle East region.”
As a result of the investment transaction, which has been completed, Tyco will fully consolidate the financial results of Tyco UAE into its Rest of World Integrated Solutions & Services segment, which is expected to add approximately $130 million in revenue on an annualized basis.
Tyco’s Australian fire detection and protection business designs, installs and services fire safety systems and equipment, and offers a range of fire protection services. It also provides specialist fire protection services to several industries including mining, marine, industrial, commercial and retail.
Details of the agreement were not disclosed. The financial results of this business are reported within the Rest of World Integrated Solutions & Services segment. In fiscal year 2015, the business had revenue of approximately $260mn.
“The agreement with Evergreen is a result of the ongoing review of our portfolio of businesses and our shift toward higher-return opportunities to provide solutions to improve customers’ safety, security and performance,” said Mr. Oliver. “Our remaining residential and commercial security, retail solutions, traffic and transportation solutions, and products businesses in Australia will continue to be important components of Tyco’s portfolio, and we are committed to serving these customers and growing these businesses.”
“The Australian fire business has been a leader in the market for more than 125 years, with the past 25 years as part of Tyco. It has a strong management team and highly dedicated employees. We thank them for their contributions to Tyco and know they will continue their tradition and passion for fire protection as part of Evergreen,” Mr. Oliver added.
The transaction is expected to close in Tyco’s fiscal second quarter of 2016, subject to customary closing conditions.
These transactions are not expected to significantly impact the company’s earnings. As a result, Tyco’s earnings per share before special items guidance of $2.05 – $2.20 for fiscal year 2016 and approximately $0.40 for the first quarter remain unchanged.