yesterday said his company's $9.2 billion bid to buy financing company CIT Group Inc. is part of a plan he started several years ago to build a conglomerate that is resistant to the effects of a weaker economy.

Recurring revenue and growth acquisitions are two reasons why Kozlowski remains comfortable with Tyco's earnings outlook for the year, despite the rash of profit warnings by other S&P 500 companies.

"People say, `You guys got to be out to lunch or something, the world is falling down around you','' Kozlowski told Reuters, in explaining why some feel the company is off kilter in sticking with its earnings targets in a waning economy.

With CIT in the fold, Tyco adds a significant weapon to its corporate arsenal, allowing it to finance client purchases of its many products and services, which range from plastic hangers and diapers to electronics and ADT security systems. While Tyco already lends money to clients, CIT's expertise and access to large amounts of capital will open new fronts for financing, company officials said.

What's more, CIT fits Tyco's plan for bolstering recurring revenue, a key safeguard against a cooling economy. Kozlowski said 38 percent of Tyco's business comes from recurring revenue.

CIT last year generated net income of $612 million, up 57 percent, on operating revenue of $2.4 billion.

Founded in 1908 in St. Louis, CIT has financed the purchase of everything from Studebaker automobiles to Boeing Co. aircraft.

CIT represents one of Tyco's largest acquisitions, but not its last.

"This doesn't stop us...(the CIT deal) is an enabler to do other acquisitions,'' Kozlowski said.

He said the deal was not the result of "GE envy,'' referring to stalwart conglomerate General Electric Co. and its capital finance arm, GE Capital.

Instead, he said his business managers have been clamouring for a vehicle to finance such things as big-ticket waste water treatment projects or an ADT home security system.

Kozlowski said a "few billion'' dollars of the proceeds from CIT divestitures could be redeployed to boost growth in Tyco operating units.

Tyco, based in Bermuda but with operational headquarters in Exeter, New Hampshire, said the deal is the firm's biggest since the 1999 all-stock buy of electronics firm AMP that was worth more than $11 billion.

The company said the CIT acquisition would add about two cents to earnings in the current year and ten cents to 12 cents in the next full fiscal year.

Tyco's share price fell $3.87 to $46.83 on the New York Stock Exchnage on the news.