Industrial conglomerate Tyco International will acquire Broadview Security for $1.9 billion in a deal that brings together two large providers of residential and commercial security in North America, the two companies said on Monday.
The cash-and-stock deal values Broadview at $42.50 a share, a more than 35 percent premium to its Friday closing price of $31.42. Irving, Texas-based Brink's Home Security Holdings Inc operates as Broadview Security.
Tyco plans to combine Broadview with its ADT security business. The company expects the deal to add to earnings before special items by about 7 cents in the first full year after closing.
The deal has been approved by the boards of both companies.
The acquisition will help Tyco, which makes security and fire-control systems, boost its presence in these markets, Chief Executive Ed Breen said in a statement.
Broadview's strong presence in the North American security market ... will enhance ADT's financial performance and support our long-term growth in this large, fragmented and highly competitive industry, Breen said.
Under the terms, Brink's shareholders may elect to receive either cash or a combination of stock and cash, subject to various criteria.
Citi acted as financial adviser to Tyco, and Morgan Stanley advised Brink's Home Security.
Tyco also said it expects to earn between 63 cents and 65 cents a share from continuing operations, excluding special items, for the fiscal first quarter of 2010. Previously, it had said it expects to earn between 48 cents and 50 cents a share.
Tyco said the preliminary results included revenue of $4.25 billion for the quarter, exceeding previous guidance of $4.1 billion.
But Tyco maintained its previous full-year earnings forecast of $2.30 to $2.50 per share before items, attributing it partly to flat order rates.
Shares of Tyco closed Friday at $37.54 on the New York Stock Exchange.
(Reporting by Anupreeta Das; editing by Martin Golan)