Tyco Inc. M&a Case Study

Assignment Title: Case Analysys – Tyco International

Tyco: The evolving Corporate Strategy:

Tyco, Inc.’s evolution since inception can be broadly categorized into 4 time periods.

1. 1960 – 1973 (under the leadership of Arthur J Rosenberg)

The strategy pursued by Tyco, Inc. was to expand rapidly through acquisitions. It transformed itself from a R&D firm to a manufacturing concern.

The period was characterized by inconsistent stock performance & wide spread operational issues.

2. 1973 – 1982 ( under the leadership of Joseph P Gaziano)

The newly set goal of the company was to be a $1Billion company by 1985. It aimed at increasing its market share & pursued revenue growth. It followed the path of unrelated diversification through a series of open market acquisitions. Even when open market acquisitions did not fructify, it made substantial gains on trading those stocks.

It faced a deep decline during the recession years. Corporate long term debt had risen to 119% of share holder equity in 1982.

3. 1982 – 1993 (under the leadership of John F Fort)

During this period, Tyco gave up the $1Bn goal & sought industry consolidation. It now focused on only related diversification –those relating to their core business functions of: Fire Protection / Flow Control; Packaging Material and Electronic & Electric Components. Its strategy was to grow consistently with lean operations. A majority of the growth was still accomplished through acquisitions, but the acquisitions during the period were based on deep analysis & thorough understanding of the target companies. Acquisitions were aimed at making Tyco a single source of manufacturing, contracting & supply for its customers. For improving the operating efficiency of the organization, it initiated a series of cost cutting measures including eliminating perks for executives & reducing staff. It pruned its non productive assets so as to make them efficient. It hived off a...