There's little argument that over the past several years, Tyco International Ltd. has emerged as a powerhouse in the hospital supply and medical device industries. Through aggressive deal-making—it has bought up several of its most important rivals in hospital supply—and a creative leveraging strategy that has enabled it to increase profits even in price-sensitive markets, Tyco has been the 800-pound gorilla in medical supply. (See "What Makes Tyco Run?" IN VIVO, March 1999 [A#1999800050.) Moreover, as the leading force in hospital supply consolidation, its growth has come virtually at everyone else's expense. As it has gobbled up one competitor after another, it seems, the bigger Tyco has grown, the smaller everyone else has gotten, in both absolute and relative terms.
For the past several years, Tyco Healthcare Group LP has been one of Tyco's best performing businesses, but it has...