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
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
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
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
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.