Tyco's NZ and Australian assets sold to private fund

Around half the New Zealand and Australian assets of troubled US giant Tyco International have been sold to a private equity fund for $113 million, Goldman Sachs JB Were said today.

The fund is managed by Goldman Sachs JBWere. Around 80 per cent of the assets purchased are in Australia.

It is the first investment of the Hauraki Private Equity No. 2 fund, which was established in April 2004 with committed capital of $75 million.

The purchase will be part debt-funded.

The divisions include electrical/manufacturing, contracting and servicing operations and building products businesses in Australia and New Zealand, and facilities management operations in Australia.

Excluded from the deal are Tyco's main brands, Wormald, ADT and Armourguard, which are considered core to Tyco's operations.

The assets sold have combined annual turnover of more than $750 million.

"The acquisition underlines Goldman Sachs JBWere's commitment to building a significant private equity business across New Zealand and Australia," Goldman Sachs said in a statement.

Tyco has been at the centre of corporate scandals in the United States but is rebuilding its reputation after former chief executive Dennis Kozlowski was charged in 2002 with looting the firm.

In New Zealand, Tyco's businesses span fire protection, security systems, electrical and mechanical services, building products and electronics.

The Australian businesses purchased include O'Donnell Griffin (ODG) and Haden, Smith Bros and York.

In New Zealand the main businesses in the electrical mechanical contracting business division are Climatech, Tempest and Electrical. Mr Wallace said there are no plans to lay off any of the 3500 staff working across 80 sites.

By part-funding acquisitions with debt, a fund such as Hauraki can buy big-number assets. Tyco was exposed in Australia in March for discussing selling assets with investment banks.

However, Tyco ruled out a sale of Wormald after the publicity in March, describing the business as core and important.

An Auckland specialist in private equity investment said Tyco was a great example of the buying opportunities created by multinationals diving in and out of New Zealand.

Times are busy for New Zealand's burgeoning private equity sector.

The new business in New Zealand and Australia will be known as Norfolk Group Holdings Ltd. It will be managed by the former manager of Tyco Services Australia and New Zealand, Glenn Wallace.

- NZPA