Tyco International Ltd (TYC - Analyst Report) recently procured an enterprise framework agreement (EFA) from Shell Global Solutions International, a subsidiary of Royal Dutch Shell plc (RDS-A) to provide fire protection products, engineered systems and lifecycle services across the globe.
As a part of this agreement, Tyco will provide safety and security services for Shell’s onshore and offshore sites in the Americas, Asia and Australia/New Zealand. Tyco has formed a Program Management Office (PMO) to provide guidance during installation and service delivery. The PMO promotes standardization, drives EFA compliance, identifies future innovations and creates templates for implementation of contracts and services.
We are bullish on the company’s fortunes based on the relative stability of the global security and fire markets as well as high and predictable cash generation, limited balance sheet risk and easy cost-out opportunities. There is a potential catalyst in the company’s solid balance sheet and liquidity position.
In the last reported quarter, Tyco signed an agreement to purchase National Fire Solutions Group (NFS) – a provider of fire protection services in Australia, including installation, inspection and maintenance services. National Fire is expected to have revenues of $65 million in 2014. Post acquisition, it will be integrated with Tyco's Fire Services business. The company has been continuous expanding its Fire Services business to augment its revenues.
Tyco provides latest fire protection and security products and services to more than three million customers across the globe. Tyco has more than 70,000 employees in more than 1,000 locations across 50 countries, serving various end markets, including commercial, institutional, governmental, retail, industrial and energy, residential and small business.
Tyco currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look now are Honeywell International Inc (HON - Analyst Report) , Macquarie Infrastructure Company LLC (MIC - Snapshot Report) and Crane Co (CR - Analyst Report) each having a Zacks Rank #2 (Buy).