Security and protection services provider Tyco International Ltd. TYC recently completed the acquisition of Texas-based gas & flame detection products manufacturer Industrial Safety Technologies. The strategic purchase will augment Tyco’s gas & flame detection capabilities across the globe and generate additional revenues.
Industrial Safety Technologies manufactures industrial safety products to protect the sanctity of workplaces and save countless lives by avoiding risks related to fire and poisonous gases. The company manufactures industrial grade fixed gas detectors, control systems, pipeline analyzers, and wireless technology products; trace consumables and checkpoint screening products for explosives and narcotics trace detectors; and portable gas detection instruments and enhancements for oil and gas, chemical, and shipping industries.
With a strong presence across diversified markets in Europe, the Middle East, and the U.S. Gulf Coast region, Industrial Safety Technologies offers Tyco an increased market penetration for cutting-edge industrial safety solutions. The transaction is expected to generate annualized revenues of $140 million for Tyco.
On the other hand, the deal will enable Industrial Safety Technologies to gain an unrivaled global platform in the form of Tyco’s proven expertise and technological prowess to better serve its customers. Tyco’s established brands will also give an additional mileage to the products of Industrial Safety Technologies.
Tyco provides latest fire protection and security products and services to more than three million customers across the globe. The company has more than 57,000 employees in over 900 locations across 50 countries, serving various end markets, including commercial, institutional, governmental, retail, industrial and energy, residential and small businesses.
We remain bullish on Tyco’s fortunes based on the relative stability of the global security markets as well as high and predictable cash generation, limited balance sheet risk and easy cost-out opportunities. The company’s solid balance sheet and healthy liquidity position are also potential catalysts to continuously fund organic and inorganic growth initiatives and maximize return for its shareholders.
Tyco currently has a Zacks Rank #3 (Hold). Other stocks in the industry that are worth considering include Pointer Telocation Ltd. PNTR, Digimarc Corp. DMRC and Napco Security Technologies, Inc. NSSC, each carrying a Zacks Rank #2 (Buy).
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