Tyco to Buy Security Firm for $1 Billion

Tyco International Ltd., the acquisitive conglomerate that owns ADT Security, said it would pay $1 billion to buy Cambridge Protection Industries in hopes of boosting revenue in its burglar alarm business.

The cash deal combines the No. 1 and No. 3 U.S. electronic security firms, giving Tyco 4 million customers, from banks to private homes that pay for burglar alarm and motion detection systems. Tyco’s ADT Security Services is the industry leader, with 3 million residential, commercial and government customers in a fragmented industry undergoing consolidation.

Tyco said Cambridge Protection, part of private equity firm GTCR Golder Rauner’s portfolio, generates annual revenue of about $500 million and will boost its earnings immediately.

Cambridge Protection’s 1 million customers also will boost Tyco’s recurring revenue, which is key for a conglomerate that makes everything from diapers and surgical stitches to undersea fiber-optic cable and valves for the drilling industry.

Tyco shares rose $1.57 to close at $57.27 on the NYSE.