Tyco International's CEO Hosts Pentair And Tyco's Flow Control Business To Combine Conference (Transcript)

This transaction presents a unique opportunity to unlock immediate synergies. We have over $90 million in synergies right from the start through one corporate structure and greater tax efficiencies. We expect further cost savings, enhanced growth prospects and a stronger balance sheet to yield even more benefits going forward.

By any measure, the new Pentair will be a stronger company with exciting platforms to future growth, and substantial value creation opportunities for all stakeholders. Let me take a moment to discuss of the transaction, that’s highlighted slide five. It’s roughly $10 billion stock-for-stock merger using a Reverse Morris Trust structure that will be tax free to shareholders of both companies. The combined company, which will be called Pentair will be domiciled in Switzerland, building on our existing presence there, where Tyco International is already incorporated.

Our main offices will be continue to be in Minneapolis where Pentair’s executive team will be lead the new combined company. Financially, this transaction is very compelling. We expect the transaction to be highly accretive to earnings adding $0.40 to 2013 EPS with combined company EPS expected to be greater than $5 a share by 2015. This combined company should also deliver roughly $1.7 billion in EBITDA in 2015 and yield an even stronger balance sheet to continue to support investment in our businesses and return cash to shareholders.

Now, we flip a slide and hand the call over to Ed Breen for few comments. Ed?

Edward D. Breen

Great, thanks Randy, and good morning everyone. I am pleased to be here with Randy and the Pentair team to discuss this transaction that clearly accomplishes what a merger should do, create significant value for the shareholders of both companies.

Let me spend a few minutes telling you a little bit about the benefits it will bring to Tyco shareholders. Based on yesterday’s closing price of Pentair, this transaction values Tyco Flow at approximately $4.9 billion, which represents immediate value to Tyco shareholders. As you can see on slide seven, this value implies a 10.4 times EBITDA multiple for Tyco Flow on a standalone basis, before any additional value uplift from synergies generated from a combination with Pentair. These synergies are expected to provide Tyco shareholders with substantial incremental value immediately and over the longer term.

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