Tyco expanded its electronic security unit through the early purchases of Alarmguard Holdings, Inc. In April of that year came Tyco's largest acquisition to date, that of AMP Incorporated, the world's leading manufacturer of electrical, electronic, fiber-optic, and wireless connection devices and interconnective systems. Raychem, maker of electric and electronic components used in appliances, telecommunications, motor vehicles, and the aerospace industry, was seen as a good follow-on to the AMP deal.
During , in keeping with an increased focus on businesses with strong recurring sales streams and low cyclicality, Tyco divested the Mueller Company and portions of Grinnell Supply Sales and Manufacturing.
Analysts had occasionally expressed concerns about the way in which Tyco was accounting for its myriad acquisitions. The deals, meantime, continued in with two major takeovers involving the electronics division. Also acquired in October was Mallinckrodt Inc. The fiscal year ending in September evolved into Tyco's most acquisitive year yet. Meantime, a deal to acquire medical products supplier C.
Bard Inc. This turn of events coincided with an abrupt strategy reversal for Kozlowski, whose dealmaking had earned him the nickname "Deal-a-Day Dennis. The backdrop for Tyco's--and Kozlowski's--precipitous fall was the wave of corporate scandals that followed the end of the bubble economy of the s. In particular, the collapse of Enron Corporation in produced a great deal of skepticism among investors regarding any company with a complex accounting structure--something that Tyco certainly had thanks to its torrid acquisitions pace.
The previous concerns about the company's accounting practices resurfaced and multiplied, and investors reacted by pummeling the stock. Late in January , Kozlowski put acquisitions on hold and announced a radical plan to boost shareholder value by splitting the firm into four separate publicly traded companies--concentrating on security and electronics, fire protection and flow control, healthcare, and financial services--and selling off the plastics business.
But Wall Street reacted extremely coolly to this plan, and just three months later, Kozlowski shifted course again, vowing to keep the company together, retain the plastics division, and sell off only CIT Group through an initial public offering IPO. It was ironic, then, that when Kozlowski resigned in June the reason given for the action was not related to his management of Tyco but rather concerned a personal matter: he had become the subject of a criminal probe into his possible evasion of New York sales tax on the purchase of expensive artwork.
Breen onboard in late July as its new chairman and CEO. Breen had been president and chief operating officer at Motorola, Inc. Breen quickly cleaned house at Tyco, overhauling the entire top management team over the course of his first several months in office and replacing two of the firm's five division presidents the plastics and adhesives division was created in January He also engineered a complete turnover of the company board, even ousting Fort.
Kozlowski's chief financial officer, Mark H. Swartz, was cashiered in August and replaced by David J. The case went to trial one year later and lasted six months. In March the judge threw out the enterprise corruption charge, but the remaining counts went to the jury.
After several weeks of jury deliberation, however, the judge was forced to declare a mistrial, citing outside pressure that had been brought to bear on one of the jurors.
The jury was apparently on the verge of returning guilty verdicts on several felony counts when the mistrial was declared. Prosecutors promised to retry the case.
Meanwhile, Breen was busy with his turnaround effort. One of his key moves was to transform the corporate culture, tightening the accounting procedures and replacing the company's opulent U. In November Tyco announced a wider restructuring program involving the shedding of more than 50 low-margin, noncore businesses, including the money-losing Tycom undersea optical-fiber network. We help technology partners integrate their third-party solutions with our in-house brands to leverage our sales teams and market on a global scale.
Compatibility Matrix Partner Portal. See Full List. Global Directory Asia India - English. North America United States - English. Access Control. How We Can Help We help you protect your business, manage your security, and work smarter with enhanced information and industry leading solutions. Tap to Call. Register Login. Tyco Integrated Security.
How was the Tyco scandal discovered? How it Was Discovered. In the SEC began an investigation after an analyst reported questionable accounting practices. How much money did Enron steal? What happened to WorldCom? When WorldCom, the telecommunications giant, failed and was put into bankruptcy, the U. What is HealthSouth scandal? HealthSouth was involved in a corporate accounting scandal in which its founder, chairman, and chief executive officer, Richard M.
Scrushy, was accused of directing company employees to falsely report grossly exaggerated company earnings in order to meet stockholder expectations. Is Tyco a Fortune company?
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