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Tyco Int'l buys Raychem
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May 19, 1999: 7:27 a.m. ET
Electronics maker adds another product line in $2.87 billion deal
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NEW YORK (CNNfn) - Electronics manufacturer Tyco International, fresh from a $11 billion buyout of AMP Inc., is purchasing telecommunications component maker Raychem Corporation in a $2.87 billion deal, the companies said Wednesday.
Tyco (TYC) valued the deal at $37 for each Raychem (RYC) share, or a 19 percent premium above Tuesday's closing price of 31-1/8. Under the terms, Tyco will pay $1.4 billion in cash and 16.1 million newly issued Tyco shares for Menlo Park, Calif.-based Raychem. Raychem shareholders can elect how much of their payout is in cash or stock.
For Tyco, the purchase adds yet another product line to the Bermuda-based manufacturer of medical products, fire protection systems and security systems. Raychem, with revenue last year of $1.8 billion, makes electronics for telecommunications and energy applications.
The purchase, which Tyco said will immediately add to earnings, comes just two months after Tyco completed an $11 billion buyout of AMP, the Harrisburg, Pa.-based electrical equipment maker.
In the AMP purchase, Tyco -- long known as a cost cutter -- eliminated 4,000 AMP jobs. It wasn't immediately clear what streamlining, if any, would occur at Raychem. A Tyco spokesman wasn't immediately available for comment.
Tyco shares gained 1-1/8 Tuesday to close at 84-3/8.
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Tyco
Raychem
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