Tektronix To Form Separate Measurement And Color Printing And Imaging Companies
Tektronix, Inc. (Wilsonville, OR) announced that its board of directors unanimously approved a plan that would result in the formation of two separate, publicly traded companies. One company will be comprised of Tektronix' Measurement Business Division (MBD); the other company will be comprised of Tektronix' Color Printing and Imaging Division (CPID). In addition, Tektronix announced today that it intends to sell or find a strategic alliance for its Video and Networking Division, excluding the VideoTele.com business unit.
Jerry Meyer, chairman and chief executive officer, said, "While Tektronix today is a leading designer, manufacturer and marketer of both measurement equipment and color printers for companies all over the world, fundamentally, color printing and measurement are two separate businesses, each with its own operational requirements, marketing strategies and competitive realities. Right now, both businesses compete for management focus and investment dollars. This plan will allow each business to concentrate on its strengths and to respond with greater flexibility and speed to the needs of its customers. We believe that this plan will enable each business to pursue its optimal long-term strategy without the limitations necessarily imposed by a larger, more diverse company. We are also confident that we will sell or find a strategic partner for our video division and that it will continue to be a leading provider of operational equipment to the professional video and broadcast markets."
The new measurement company will retain the "Tektronix" name and be headquartered in Beaverton, OR. Tektronix' MBD had fiscal 1999 net sales of approximately $845 million and approximately 3,600 employees worldwide. MBD is a worldwide market leader in telecommunications test products, oscilloscopes, signal measurement and television test equipment. The new company would continue to capitalize on the growth opportunities in the computer, communications and video markets as these three markets converge. Tektronix' VideoTele.com business unit is now a part of MBD.
The new color printing and imaging company, which has not yet been named, will be headquartered in Wilsonville, Oregon. CPID had fiscal 1999 net sales of approximately $725 million and approximately 2,100 employees worldwide. The new color printing and imaging company will continue to be a recognized market leader in business color printing. Building on more than 15 years of market-leading research and development, Tektronix color printers provide print solutions that are easy to use and affordable. CPID develops and markets the award-winning family of Phaser color printers, which include color laser and solid ink technologies.
Tektronix is considering an initial public offering (IPO) for approximately 15 percent of the new color printing and imaging company prior to the end of its current fiscal year. The remaining shares would be distributed, on a tax-free basis, to Tektronix shareholders at some time after theoffering.
Management Upon completion of the separation of the two companies, Jerry Meyer will become chief executive officer of the new color printing and imaging company. Carl Neun, senior vice president and chief financial officer of Tektronix, will become chief executive officer of the new measurement company. Both Meyer and Neun will continue in their current positions at Tektronix untilthe spin-off is complete. Rick Wills, currently president of MBD, will become president of the new measurement company and Gerry Perkel, currently president of CPID, will become president of the new color printing and imaging company.
The company expects the separation of the businesses to have no significant impact on employment levels.
In addition, Tektronix intends to sell or find a strategic alliance for its Video and Networking Division (VND). The company's video business has operations in Grass Valley, California; Beaverton, Oregon; and around the world. Its products include the award-winning and market-leading Profile video server product line.
Tektronix is continuing on its plan, announced in November 1998, to eliminate $65 million in total annual operating expenses by September 1999. The company anticipates that the revenue opportunities of CPID and MBD, combined with the continued initiatives to reduce operating expenses, will allow the company to deliver improved operating margins and profitability during the next fiscal year.
Any proceeds from the sale of the video division or other asset dispositions may be utilized to pay down outstanding debt or for other corporate purposes. Meyer noted that over the past several years, Tektronix has made significant investments in systems upgrades, facility renovations and manufacturing. With these improvements largely in place, capital expenditures are expected to be in the $70 million to $80 million range for fiscal 2000, down from $117 million in fiscal 1999 and $155 million for fiscal 1998.
J.P. Morgan & Co. is acting as a financial advisor to Tektronix.
Tektronix, Inc. Phone: 800-758-5804