Tyco Electronics to Acquire ADC, Creating a World Leader in Broadband Connectivity
SCHAFFHAUSEN, Switzerland and EDEN PRAIRIE, Minn., July 13 -- Complementary Product Offerings Will Help Customers Deliver High-Speed Video and Data Communications
o Tyco Electronics Reports Preliminary Fiscal Third Quarter Results
o Sales of $3.1 Billion and Book-to-Bill Ratio of 1.06
o Diluted Earnings Per Share From Continuing Operations (GAAP EPS) of $0.72; Adjusted EPS of $0.70
Tyco Electronics (NYSE:TEL) and ADC (NASDAQ:ADCT) announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics' Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world.
Tom Lynch, Chief Executive Officer of Tyco Electronics, said, "This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using -- from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user."
Robert E. Switz, Chairman, President and CEO of ADC, said, "ADC has a strong heritage of providing innovative wired and wireless solutions that have enabled the expansion of advanced broadband networks worldwide. As part of Tyco Electronics, our organization's ability to serve the world's leading telecommunications services providers and enterprises will be strengthened significantly. I have great respect for Tyco Electronics and know that they share our commitment to meeting customers' changing next generation network needs."
The combined organization will offer a complete product portfolio across every major geographic market. It will also add ADC's Distributed Antenna System (DAS) products, which will expand Tyco Electronics' wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC's professional services organization in the US to its business.
"We expect ADC to be accretive to our earnings in the first year and to reach our target operating margin of 15 percent in the third year after the acquisition," said Lynch.
The transaction is structured as a tender offer to be followed as soon as possible by a merger. The transaction is subject to customary closing conditions, including the tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter 2010.
In conjunction with today's announcement, Tyco Electronics reported preliminary results for the fiscal third quarter ended June 25, 2010. The company reported sales of $3.1 billion, an increase of 23 percent over the prior year quarter and up 4 percent sequentially. GAAP EPS were $0.72 in the quarter which included $0.02 per share of income related to other items net of restructuring charges. Adjusted EPS were $0.70 in the quarter. The company's book-to-bill ratio was 1.06 for the quarter and 1.08 excluding Subsea Communications. The company will report complete results and provide further details on its fiscal third quarter before trading begins on July 22, 2010.
CONFERENCE CALL AND WEBCAST
o The company will hold a conference call for investors today beginning at 11 a.m. EDT.
o Internet users will be able to access the company's webcast, including
slide materials, at the "Investors" section of Tyco Electronics'
website: http://investors.tycoelectronics.com/.
o For both "listen-only" telephone participants and those participants
who wish to take part in the question-and-answer portion of the call,
the dial-in number in the United States is (800) 398-9386. The
telephone dial-in number for participants outside the United States is
(612) 332-0342.
o An audio replay of the conference call will be available beginning at
1:00 p.m. on July 13, 2010 and ending at 11:59 p.m. on July 23, 2010.
The dial-in number for participants in the United States is (800)
475-6701. For participants outside the United States, the replay
dial-in number is (320) 365-3844. The replay access code for all
callers is 164749.
ABOUT TYCO ELECTRONICS
ABOUT ADC
ADC provides the connections for wireline, wireless, cable, broadcast, and enterprise networks around the world. ADC's innovative network infrastructure equipment and professional services enable high-speed Internet, data, video, and voice services to residential, business and mobile subscribers. ADC (NASDAQ:ADCT) has sales into more than 130 countries. Learn more about ADC at www.adc.com.
Source: Tyco Electronics
CONTACT:
Tyco Electronics Media Relations: Joan Wainwright,
+1-610-893-9500 Office, or +1-609-903-5329 Mobile,
joan.wainwright@tycoelectronics.com;
ADC Media Relations: Mike Smith,
+1-952-917-0306 Office, mike.smith.dir@adc.com;
Tyco Electronics +Investor Relations: John Roselli, +1-610-893-9559 Office, john.roselli@tycoelectronics.com, or Keith Kolstrom, +1-610-893-9551 Office, keith.kolstrom@tycoelectronics.com; ADC Investor Relations: Jon Oberle,
+1-952-917-2507 Office, jon.oberle@adc.com
Web Site: http://www.tycoelectronics.com/
