RealTime IT News

And the Winner Is... Tyco

Lucent Technologies Inc. got a lot lighter Monday when it unloaded its giant division on electronics manufacturing and service company Tyco International Ltd. for $2.5 billion in cash.

Tyco picked up Power Systems Business, also known as LPS, which will continue to be a significant supplier of power solutions to Lucent as part of its integrated product offerings under a multiyear supply agreement. Tyco said it expects LPS to be immediately accretive to its earnings.

LPS provides energy solutions and power products for telecommunications service providers and for the computer industry.

Specifically, LPS provides a full line of power products, including AC/DC and DC/DC switching power supplies, batteries, power supplies and back up power systems.

The giant division includes three division of labor.

The Energy Systems group provides energy reserve power systems for telecommunication service providers; its products include battery plant power systems, engineering, consultancy, installation and maintenance.

The Board Mounted Power/Point of Load group provides AC/DC and DC/DC rectifiers and conversion systems to the communications and computer original equipment manufacturers market. The Custom Power group delivers customer- and application-specific solutions.

Major LPS products include the Enhanced Distributed Power Architecture targeted for indoor data processing applications, and its Cabinet Power Systems designed with extended temperature range capabilities for outdoor environments.

The deal is a winning play for Bermuda-based Tyco, whose Chairman and Chief Executive Officer L. Dennis Kozlowski said the acquisition would provide a link between Tyco Electronics' electronic components and TyCom's communications networks.

Tyco operates in more than 100 countries and has reported fiscal 2000 sales of approximately $28.9 billion.

Lucent, too, should be happy. The firm both streamlined its business further and picked up a significant amount of cash in the deal. Along with streamlining often comes layoffs: Lucent issued 240 pink slips last week in its vast reshuffling.

The company, which struggled to find a market for its traditional voice equipment and optical networking equipment, is restructuring to address the service provider market. It had already spun off successful networking division Avaya in September.