Tyco International plc TYC, a leading fire protection and security service company, recently inked a definitive deal worth ZAR 1.9 billion ($140 million) to sell its security business in South Africa to Fidelity Security Group.
Fidelity Security Group is South Africa's largest integrated security solutions provider. The company offers a wide range of security services and related products. With approximately 47,000 employees and presence across 142 locations in South Africa, Fidelity provides its services to top listed and state owned companies along with multinational conglomerates.
The South African security business of Tyco functions under the ADT brand. The deal is expected to be completed by first-quarter fiscal 2017. On completion of the sale, the company will focus on its core business which provides fire, security and life safety products in the region.
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Tyco is repositioning its portfolio to improve its top line and bottom line. The strategic divestment is an endeavor in this regard.
This segment of the company is expected to generate revenue of approximately $160 million, for the fiscal year 2016. Deutsche Bank AG DB is the exclusive financial adviser, whereas Simpson Thacher & Bartlett LLP and Bowman Gilfillan are the legal advisors to Tyco on this agreement.
Tyco is the largest fire protection and security company in the world, serving over three million customers. With an employee base of over 57,000, the company has branches in more than 900 locations, stretching across 50 countries in various end markets.
Tyco currently has a Zacks Rank #3 (Hold). A couple of stocks that look promising in the same industry include Alarm.Com Holdings, Inc. ALRM and Ascent Capital Group, Inc. ASCMA , both carrying a Zacks Rank #2 (Buy).
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