I was just getting used to the TV commercials for Motley Fool Hidden Gems recommendation Broadview Security
Well, its tenure as an independent company didn't last long. Tyco International
Broadview's strength in home security monitoring should dovetail nicely with ADT's commercial security portfolio. Tyco sees $150 million in annual cost savings from the deal, and Broadview will add $0.07 to Tyco's earnings in the first year, and twice that in the second year of integration.
This buyout combines the two largest providers of monitored security services in North America, but the market remains competitive, and antitrust concerns don't really factor in. The top five providers own only 40% of the market, according to Broadview's SEC filings. Protection One
In an interview with Bloomberg, Tyco CEO Edward Breen also noted that the company was looking to acquire a couple of other companies in the $300 million to $500 million range, across Tyco's security and fire and flow-control businesses.
As it happens, the $42.50 price tag for Broadview is just above what our Hidden Gems analysts thought the company was worth when they recommended it last May. Since then, we've seen a quick 46% return and a clean exit, as industrial behemoth Tyco clearly is too large to ever be a Hidden Gem.
Bye-bye, Broadview! I hope you didn't spend too much on that new signage.
Which companies might make a good strategic fit for Tyco's acquisitiveness? Leave your comments in the box below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Fool owns shares of Broadview Security. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.