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Tyco, Pentair in $10-Billion Merger

March 28, 2012
New flow-control products group sees advantages in global scale

Tyco International plans to merge its Tyco Flow Control business with Minneapolis-based Pentair Inc. in an all-stock deal that brings together companies with combined valuations of $10 billion. What emerges will be a specialized manufacturer of water and fluid-control products, valves and controls, and equipment protection products with estimated annual sales of $7.7 billion.

The new company will be called Pentair Inc. and headquartered in Schaffhausen, Switzerland. Tyco’s current shareholders will own 52.5% of the new company, and Pentair’s current chairman and CEO Randall J. Hogan will retain those positions in the new organization.

Last September Tyco split its operations into three, independent publicly traded companies; one of these is Tyco Flow Control, which earlier last year completed a $300-million purchase of KEF Holdings Ltd., an Emirates-based producer of steel castings for oil-and-gas, chemical, mining equipment, and power industries.

Central Castings Corp. in Anniston, AL, operates under a separate business unit, Tyco Fire Protection.

Pentair is a Minneapolis company with two divisions, Pentair Water and Fluid Solutions and Pentair Technical Products, which produces enclosures for electronics and electrical equipment.

The merger partners said the new company will benefit from increased global access, greater presence in growth industries like energy, infrastructure, and general industry, a portfolio of complementary products, operating and tax synergies, and a strong balance sheet with increased cash-flow possibilities.

"This is a highly compelling, transformational transaction, bringing together two great companies to create substantial value for shareholders and enhanced growth prospects,” Hogan stated. “The addition of Tyco Flow perfectly aligns with Pentair's growth strategy to expand globally, invest in high-growth platforms, and leverage the Pentair Integrated Management System to generate strong shareholder returns.

About the Author

Robert Brooks | Content Director

Robert Brooks has been a business-to-business reporter, writer, editor, and columnist for more than 20 years, specializing in the primary metal and basic manufacturing industries. His work has covered a wide range of topics, including process technology, resource development, material selection, product design, workforce development, and industrial market strategies, among others. Currently, he specializes in subjects related to metal component and product design, development, and manufacturing — including castings, forgings, machined parts, and fabrications.

Brooks is a graduate of Kenyon College (B.A. English, Political Science) and Emory University (M.A. English.)