Tyco to Merge with Pentair in $5Billion All Stock Deal


On Wednesday, Tyco International Ltd. (NYSE:TYC) agreed in an all-stock transaction merger with Pentair for its flow control unit.

According to an article in The New York Times by MICHAEL J. DE LA MERCED,  Tyco will continue with its breakup plan and make its flow business as an standalone entity. The deal also has Pentair immediately merging with the new independent company.

The deal has Tyco shareholders receiving 52.5 percent of the company and the balance to Pentair investors, along with $275 million debt from the flow business.

Tyco Flow Control will have a $4.9 billion value as compared to Pentair, Inc. (NYSE:PNR)‘s $4 billion market value.

The new company will have the Pentair name and its chief executive, Randall J. Hogan, will lead it. Hogan said of the transaction, “This is a highly compelling, transformational transaction, bringing together two great companies to create substantial value for shareholders and enhanced growth prospects.”

The Pentair board will be intact but Tyco will add two directors.

Pentair will keep its Switzerland headquarter while Minnesota will house its American offices. The new company should have approximately 30,000 employees, divided evenly between Pentair and Tyco.

Tyco had been trying to break up the company for six months after announcing a plan to divest into three companies. It had considered the entities being independently acquired, with the flow business seen as particularly attractive with its market from valves and pumps, according to The New York Times.

In addition, Tyco Flow saw $4 billion in annual revenues.

Investors responded positively in pre-market to the news with Pentair rising to $48 (20 percent) while Tyco shares increased to $55.20 (3.1 percent).

The deal is expected to be completed in September. Tyco is still working on breaking off two divisions: ADT home alarm and  commercial fire and security.



Saved Articles

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted & limited time offer for being a sophisticated and loyal reader.

ValueWalkPremium is a website and newsletter on the latest industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today and get our exclusive content for 40% off. This is our second biggest discount ever!!

Use coupon code VIP20 or click on the button below

Limited time offer only ENDS 2/29/2019 or after next 25 subscribers take advantage whichever comes first – please do not share this discount with others