L. Dennis Kozlowski.

• Author: Porter, Martin
• Position: Chairman and CEO of Tyco International and corporate director of U.S. Office Products Co.

Tyco International's master of acquisitions has acquired a new board postion at U.S. Office Products Co.

In January 1998, U.S. Office Products Co. (USOP) announced a strategic restructuring plan that ultimately split the office products supplier into five companies. Partnering themselves with USOP in this restructuring was an affiliate of an investment fund managed by Clayton, Dubilier & Rice Inc., which acquired nearly a 25% ownership stake in the company. Six months later, three USOP businesses were spun off and made their debut as initial public offerings. (A fourth received such low demand that it was canceled as an IPO altogether and simply spun off to existing USOP shareholders.) The newly restructured USOP emerged with a new chairman, Clayton Dubilier Principal Charles P. Pieper, and two new independent directors. One of them is L. Dennis Kozlowski, chairman and CEO of Tyco International.

Kozlowski, a 22-year veteran of Tyco, tells DIRECTORS & BOARDS the reason he joined USOP's board is the opportunity to work with longtime Clayton Dubilier associates at USOP and to use his influence as a director to bring about good results at the restructured company. He also now has a "personal sizeable investment" in USOP, which he is confident will do well.

During his six-year tenure as chief executive, Kozlowski's management acquired nearly 90 companies, quadrupling revenues from $3 billion to $13 billion. He maintains a purposeful strategy of acquiring companies that fit into one of Tyco's four business units: fire protection and security systems, disposable products (mostly medical), valves and flow control products, and industrial electronics. Just this year, he oversaw the acquisition of at least five companies, including cash purchases of Sherwood-Davis & Geck from American Home Products Inc. for $1.77 billion, and Wells Fargo Alarm from Borg-Warner Security for $425 million. In May, Tyco announced plans to acquire U.S. Surgical Corp., a medical products manufacturing company, in an stock exchange valued at $3.3 billion.

Investment banker Philip Hampton, Tyco's lead director for nearly two years, says he remembers joining Tyco's board when it was only a $400 million company and seen in the minds of investors as being solely a fire protection business. Part of Kozlowski's acquisition strategy, he says, involved minimizing the impact of cyclicality by acquiring service-oriented businesses to complement Tyco's existing manufacturing...