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Tyco buys Sherwood-Davis
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December 22, 1997: 6:48 a.m. ET
Tyco International buys AHP medical supplies unit for $1.7 billion
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NEW YORK (CNNfn) - Tyco International Ltd. has agreed to buy a medical products division of American Home Products Corp. for $1.7 billion.
The deal, announced Monday, will bring into Tyco's holdings AHP's Sherwood-Davis & Geck unit, which makes surgical sutures, catheters and feeding tubes, among other medical supplies.
American Home Products (AHP) put the division up for sale a few months ago in an effort to focus on its core businesses of pharmaceuticals, animal-health and agricultural products.
The Madison, N.J.-based Tyco has more than doubled its size over the past year with a flurry of acquisition activity. It has paid $9 billion in total for 27 companies since January. Its most notable deal was a $5.6 billion agreement with security-alarm company ADT Ltd.
Tyco's main operations include making valves and pipes, providing fire and security services, manufacturing medical supplies and also electronics.
Tyco's (TYC) $1.7 billion deal may raise some eyebrows among investors. The price tag is more than 12 times Sherwood-Davis' 1997 operating profit, forecast at $140 million. However, Tyco believes it can cut costs at the company by about $35 million to $40 million. 
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