A hard economy is a breeding ground for mergers and aquisitions which is evidenced by Bermuda-based Tyco International Ltd.'s purchase of Paragon Trade Brands in a $650 million buyout.

Paragon is based in Norcross, Georgia, and has manufacturing plants in Waco, Harmony, Pennsylvania, Macon, Georgia and Tijuana, Mexico, employing 1,100 people with sales of $557 million last year.

The sale is contingent upon approval by the Federal Trade Commission which the company expects will be in the first quarter of next year.

"We believe that the size and strength of Tyco will allow our business to continue to grow to a degree even beyond what we have been able to accomplish," said Michael Riordan, chairman and CEO of Paragon.

Tyco, a conglomerate with $36 billion in annual sales, reportedly will pay $43.50 a share for Paragon and the $650 million price includes the assumption of Paragon debts.

In 1998, Paragon Trade Brands filed for Chapter 11 bankruptcy protection after a federal judge in Delaware ruled it infringed on Procter & Gamble's diaper patent.

Paragon was assessed $178 million in the infringement case.

It also paid $115 million to Kimberly-Clark for other infringements.

Paragon's reorganisation included selling most of the company to Wellspring Capital Management, a private investment group.