ADT 2011 Annual Report Download - page 141

Recent Transactions
On September 19, 2011, the Company announced that its Board of Directors approved a plan to
separate the Company into three separate, publicly traded companies consisting of the Company’s
North American residential security business, its flow control business, and its commercial fire and
security business. The 2012 Separation is expected to be completed by the end of the third calendar
quarter of 2012 through a tax-free pro rata distribution of all of the equity interest in the flow control
and North American residential security business.
Completion of the proposed separation is subject to certain conditions, including final approval by
the Tyco Board of Directors and shareholders, receipt of tax opinions and rulings and the filing and
effectiveness of registration statements with the SEC. The separation will also be subject to the
completion of any necessary financing.
During fiscal 2011, we made a number of strategic investments within our three core businesses.
On April 29, 2011, our Tyco Security Solutions segment completed the acquisition of Signature Security
Group for $184 million, net of cash acquired of $2 million. Signature Security Group is an electronic
security company operating in Australia and New Zealand primarily in small business and residential
markets. On June 29, 2011, the Company’s Flow Control segment finalized the acquisition of a 75%
equity interest in privately-held KEF Holdings Ltd. (‘‘KEF’’), a vertically integrated valve manufacturer
in the Middle East, for approximately $295 million, net of cash acquired of $1 million. Additionally, in
connection with the acquisition we acquired $64 million of debt which was substantially paid as of
September 30, 2011. On September 1, 2011, our Fire Protection segment completed the acquisition of
Chemguard Inc. (‘‘Chemguard’’) for approximately $130 million, net of cash acquired of $1 million.
Chemguard is a provider of firefighting foam concentrates and equipment, foam systems, services and
specialty chemicals. On September 15, 2011, the Company reached an agreement to acquire
Visonic Ltd. (‘‘Visonic’’), a global developer and manufacturer of electronic security systems and
components, for approximately $100 million in cash. The transaction is expected to close during the
first quarter of fiscal 2012. Following the close of the transaction, the Company intends to combine
Visonic with the Company’s Tyco Security Solutions segment. See Note 5 to the Consolidated Financial
Statements
On November 9, 2010, we announced that we entered into an investment agreement (the
‘‘Agreement’’) to sell a majority interest in our Electrical and Metal Products business to an affiliate of
the private equity firm Clayton, Dubilier & Rice, LLC (the ‘‘Investor’’). We formed a newly
incorporated holding company, Atkore International Group Inc. (‘‘Atkore’’), to hold our Electrical and
Metal Products business. On December 22, 2010, the transaction closed and the Investor acquired
shares of a newly-created class of cumulative convertible preferred stock of Atkore (the ‘‘Preferred
Stock’’). The Preferred Stock initially represented 51% of the outstanding capital stock (on an
as-converted basis) of Atkore. In connection with the closing, we received cash proceeds of
approximately $713 million and recorded a gain of $259 million during the first quarter of 2011. During
the year ended September 30, 2011, we recorded working capital adjustments of $11 million that
reduced the gain on disposal. The gain on disposal is recorded within restructuring, asset impairments
and divestiture (gains) charges, net in our Consolidated Statement of Operations.
On September 30, 2010, we sold our water business in Europe, which was part of our Tyco Flow
Control segment. The business met the discontinued operations criteria and has been included in
discontinued operations for all periods presented. The sale was completed for approximately
$264 million in cash proceeds, net of $7 million of cash divested on sale, and a pre-tax gain of
$172 million, which was largely exempt from tax. The gain was recorded in income from discontinued
operations, net of income taxes in the Company’s Consolidated Statement of Operations.
References to the segment data are to the Company’s continuing operations. As discussed above,
the Company realigned certain business operations during the first quarter of fiscal 2011 and
38 2011 Financials