Looks like that $500 million came in handy

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04/16/2008

Interesting to look back on our story about Tyco taking out a $500 million line of credit following its split-up last year. There was some debate about what the money might be for: Paul Fitzhenry, Tyco spokesman, did not have any further comments on the line of credit. However, industry analyst Jack Mallon, managing partner of Mallon Associates, noted that taking a $500 million line of credit is not something a company does just as a matter of course: "The company's been in a holding pattern for the past three years. They have talked somewhat about acquisitions but haven't delivered in the security area." Is that about to change? "Perhaps," Mallon said. "The time is right [for expansion and acquisitions] and the opportunity is there," according to Mallon. Tyco may have secured the credit line for the purpose of starting a "more aggressive growth program," he said. He tempered this speculation, however, saying there may be "another factor, they may be contemplating some other capital expenditures." I guess $187 million is kind of chump change for Tyco International, but it does make me feel like we sort of called that.