Monday, June 04, 2007

Tyco Triple Play

Tyco has a $65 billion market capitalization and long-term debt of $10.5 billion for a debt-to-equity ratio of 0.28. In the 12 months ended March 30, 2007, the company earned $3.7 billion on revenue of $42.4 billion, and generated operating cash flow of $6.3 billion. At about $33, shares of Tyco are up 21% in the past year, and trade for 16.8 times the consensus forecast for 2007 earnings per share of $1.96.

Before the end of June, Tyco will spin off the electronics and health care divisions, which will become independent, publicly traded companies. The spin-off is structured as a tax-free distribution and existing Tyco shareholders will hold 100% of the equity in the three companies.

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Source: Whitney Tilson

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