DOW JONES NEWSWIRES
Tyco Electronics Ltd. (TEL) said it agreed to sell its wireless
systems business to Harris Corp. (HRS) for $675 million in
cash.
"This acquisition greatly accelerates our entry into the land
mobile radio systems market and creates a significant opportunity
for growth in both North American and international markets," said
Dana Mehnert, president of Harris' RF communications segment.
Tyco Electronics' shares jumped 6.5% to $15.20 in after-hours
trading while Harris' were unchanged at $28.20.
Tyco Electronics' wireless systems unit, which will be combined
into the RF communications segment, develops large-scale
communications systems based on Internet Protocol technology for
law enforcement, fire and rescue, utility, transit and public
service customers. The business generated sales of $463 million in
fiscal 2008.
Harris will finance the deal with a combination of existing
cash, borrowings available under its $750 million revolving credit
facility and long-term debt.
The acquisition is expected to boost Harris' earnings slightly
in fiscal 2010, excluding acquisition-related charges, and to
contribute significantly to earnings in fiscal 2011 and 2012.
Tyco Electronics Chief Executive Tom Lynch said the sale,
expected to close this summer, "will increase our focus on our core
connectivity business and substantially completes the streamlining
of our portfolio that we began two years ago."
Tyco also said it expects to report a fiscal second-quarter
operating loss of $3.6 billion to $4.1 billion because of a
goodwill write-down and restructuring and litigation charges.
Expected revenue of $2.46 billion was in line with previous
guidance.
Tyco Electronics split from Tyco International Ltd. (TYC) last
June.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com