Tyco in $2.3-Billion Deal to Buy Sensormatic

Tyco International Ltd., whose ADT unit is the biggest maker of burglar alarms, agreed Friday to buy Sensormatic Electronics Corp. for $2.3 billion.

Sensormatic invented security tags that supermarkets and retailers attach to merchandise to deter shoplifting. It also makes access and surveillance systems that are used in airports.

Tyco will exchange stock valued at $24 for each Sensormatic share, a 61% premium over its closing price Thursday, and will assume $116 million in debt. Sensormatic shares jumped $8.18 to close at $23.12 on the New York Stock Exchange.

Tyco Chief Executive Dennis Kozlowski, who has made more than $55 billion in acquisitions in the last four years, buys companies to expand product lines and then improves performance in part by consolidating operations and slashing costs.

Tyco expects to cut $160 million in costs at Sensormatic, most of that in the first year, Kozlowski said.

Sensormatic, based in Boca Raton, Fla., had $1.1 billion in sales in its fiscal year ended June 30. About 55% of sales were in the U.S., and the rest were mainly in Europe.

Shares of Tyco, based in Bermuda but run from Exeter, rose 51 cents to close at $53.29 on the NYSE. The shares have climbed more than fivefold in the five years ended in July.