Will UTC Fire & Security make a play for a Tyco now?

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09/20/2011

Big news yesterday out of Tyco. The conglomerate that Koslowski spent years building, is slowly being sold off and consolidated by Ed Breen. It's a smart move, according to company executives I surveyed yesterday.  One company executive said it'll be much easier to grow ADT resi and small business and ADT commercial and fire as two separate traded companies. And, flow control doesn't really fit in anyway.

Yesterday's announcement that Tyco would split into three independent, publicly traded companies, had people wondering--again--if UTC Fire and Security might make a play for one of the peices. After all, last Friday, Rueters reported that its parent company United Technologies Corp, " was lining up financing in the double-digit billions of dollars to support a major acquisition in the U.S., according to two people with direct knowledge of the matter."

Tyco's stock rose for a while on Friday on rumors that UTC was eyeing Tyco, until someone determined that the amount of cash UTC was raising wasn't enough to purchase the whole of Tyco. So, tongues were wagging yesterday. With Tyco splitting up, UTC could buy just a part of Tyco. They could make a resi play or beef up their commercial fire and security business. Then again, if Ed Breen and company were really teeing the fire and security business up for sale to UTC, why'd they roll the security products business into the mix? That would be a lot more integration of product, something UTC Fire & Security seems to be pretty busy with these days.

Word is that UTC is actually interested in Goodrich (aerospace not tires) and that they're in talks to acquire the company for like $15b. Here's a story on the Goodrich deal, which the reporters say could be announced later this week.

I'll be meeting with ADT executives today, so will have more information on the split later.  I'm talking to Schneider tomorrow. Remember the Schneider rumors this summer? Maybe they'll be interested in the Commerical fire and security business now that it'll be flying solo?