<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DYNATECH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-02258582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3 NEW ENGLAND EXECUTIVE PARK
BURLINGTON, MASSACHUSETTS 01803-5087
1 (781) 272-6100
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
---------------
MARK V.B. TREMALLO
Corporate Vice President, General Counsel
Dynatech Corporation
3 New England Executive Park
Burlington, Massachusetts 01803-5087
1 (781) 272-6100
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
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Copy to:
FRANCI J. BLASSBERG
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
1 (212) 909-6000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Amount maximum maximum
Title of each class of to be offering price aggregate Amount of
securities to be registered registered per unit offering price registration fee
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<S> <C> <C> <C> <C>
Rights to Purchase Common
Stock (1).................... 4,983,048 $0 $0 $0
Common Stock.................. 4,983,048 $4.00 $20,000,000 $5,280
</TABLE>
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(1) Pursuant to Rule 457(g), no separate registration fee is required for the
rights since they are being registered in the same registration statement as
the common stock underlying the rights.
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities, or accept any offer to buy these securities, until +
+the registration statement we have filed with the Securities and Exchange +
+Commission becomes effective and we deliver this prospectus to you in final +
+form. We are not using this prospectus to offer to sell these securities or +
+to solicit offers to buy these securities in any state or other jurisdiction +
+where their offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated April 24, 2000
Preliminary Prospectus
Dynatech Corporation
Rights Offering
of 4,983,048 Shares of Common Stock at $4.00 per Share
. If you held our common stock on April 20, 2000, Dynatech has granted you
rights to purchase additional shares of common stock for a subscription price
of $4.00 per share. You have been granted 0.389 rights for every share of
common stock you held on that date. Each whole right entitles you to purchase
one share of common stock for $4.00. This is your "basic subscription
privilege."
. If you fully exercise your rights and other shareholders do not fully
exercise their rights, you may elect to purchase additional shares on a pro
rata basis. This is your "oversubscription privilege."
. We will not issue fractional rights or fractional shares. If the number of
shares of common stock you held on the record date would result in your
receipt of fractional rights, the number of rights issued to you is being
rounded down to the nearest whole right. As a result, our shareholders of
record that held fewer than three shares as of April 20, 2000 are not
receiving rights.
. Our common stock is traded in the over-the-counter market under the symbol
"DYNA". On , 2000, the last reported sale price for the common stock
was $[ ] per share.
. The rights expire on , 2000, at 5 p.m., New York City time. We have the
option of extending the expiration date.
. The rights are non-transferable.
. We will use all net cash proceeds from this offering for potential
acquisitions and other general corporate purposes.
. To finance the merger of one of our subsidiaries with Wavetek Wandel
Goltermann, Inc. ("WWG"), a designer and manufacturer of communications test
equipment and systems, we were required to raise substantial debt and equity
financing in a short amount of time. As a result, we entered into a new
credit facility with a syndicate of lenders and sold newly-issued but
unregistered shares of our common stock to Clayton, Dubilier & Rice Fund V
Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited Partnership
for $4.00 per share. Our sale of unregistered common stock to the Clayton,
Dubilier & Rice funds allowed us to raise the cash equity we needed within
the time frame required to consummate the WWG merger. However, as a result of
our sale of common stock to the Clayton, Dubilier & Rice funds, the
percentage equity ownership interest in Dynatech of our other shareholders
was diminished. Now that the WWG merger is complete, we are conducting this
offering so that such shareholders may, at their option, reverse the
diminution of their percentage equity ownership interest of Dynatech by
purchasing shares of newly-issued shares of our common stock for the same
price as was paid by the Clayton, Dubilier & Rice funds.
. Clayton, Dubilier & Rice Fund VI Limited Partnership, which purchased [ ]%
of our outstanding common stock in connection with the WWG merger, has agreed
to purchase all shares of our common stock that are offered in this rights
offering but not purchased by our other shareholders. If none of the rights
distributed in this offering are exercised, Clayton, Dubilier & Rice Fund VI
Limited Partnership's percentage equity ownership of Dynatech will increase
to approximately [ ]%.
. Investing in our common stock involves certain risks. See "Risk Factors"
beginning on page 16.
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<TABLE>
<CAPTION>
Subscription Discounts and Proceeds to the
Price Commissions Company
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<S> <C> <C> <C>
Per Share Total...................... $4.00 None $4.00
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Total................................ $4.00 None $19,932,193
</TABLE>
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Subscription Agent: Equiserve Trust Company, N.A.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense. The rights offering is not being made, nor will Dynatech
accept subscriptions for common shares from any person, in any jurisdiction in
which the rights offering or the acceptance thereof would not be in compliance
with the securities or "Blue Sky" laws of such jurisdiction.
The date of this Prospectus is .
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, special reports and other information with the
Securities and Exchange Commission. These filings are available to the public
from commercial document retrieval services and at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549,
and in New York, New York and Chicago, Illinois. Please call the SEC at
1(800)SEC-0330 for further information on the public reference rooms and copy
charges.
The SEC allows us to "incorporate by reference" the information we file with
it. This permits us to disclose important information to you by referencing
these filed documents. We incorporate by reference in this prospectus the
following documents which have been filed with the SEC:
. Our Annual Report on Form 10-K for the fiscal year ended March 31, 1999,
filed with the SEC on June 14, 1999;
. Our Quarterly Report on Form 10-Q for the quarterly period ended June
30, 1999, filed with the SEC on August 5, 1999;
. Our Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1999, filed with the SEC on November 4, 1999;
. Our Quarterly Report on Form 10-Q for the quarterly period ended
December 31, 1999, filed with the SEC on February 14, 2000;
. Our Current Report on Form 8-K concerning our acquisition of Applied
Digital Access, Inc., filed with the SEC on November 9, 1999, and
supplemented by our Current Report on Form 8-K/A, filed with the SEC on
January 14, 2000;
. Our Current Report on Form 8-K concerning our acquisition of Wavetek
Wandel Goltermann, Inc., filed with the SEC on , 2000.
. Our Information Statement on Schedule 14C concerning the proposed
adoption of a Certificate of Amendment to our Certificate of
Incorporation, filed with the SEC on March 20, 2000 and amended on April
18, 2000.
. The description of our common stock found under the heading "Description
of Registrant's Securities to be Registered" in the Company's
Registration Statement on Form 8-A, as amended (file no. 000-07438),
filed with the SEC on June 29, 1998.
We incorporate by reference all documents filed pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of
this prospectus and prior to the termination of this offering.
We will provide promptly without charge to you, upon written or oral
request, a copy of any document incorporated by reference in this prospectus,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents. Requests should be directed as
follows:
Dynatech Corporation
3 New England Executive Park
Burlington, Massachusetts 01803-5087
Telephone: 1 (781) 272-6100
Attention: Investor Relations
You should request any such information at least five days in advance of the
date on which you expect to make your decision with respect to this offer. In
any event, you must request such information prior to , 2000.
<PAGE>
PROSPECTUS SUMMARY
This summary highlights some of the information in this prospectus. The
summary is not complete and may not provide all information you should consider
before deciding whether or not to exercise the rights. Therefore, we urge you
to read the entire prospectus carefully. We also encourage you to review the
financial statements and other information provided in the reports and other
documents that we file with the SEC, as described under "Where You Can Find
More Information" on the inside front cover of this prospectus.
The market share and competitive position data contained in this prospectus
are approximations derived from our estimates, which we believe are reasonable
but which have not been independently verified, and from industry sources. We
have not independently verified market share and competitive position data
provided by third parties or industry or general publications. Although such
market and competitive position data are inherently imprecise, based on our
understanding of the markets in which we compete, we believe that such data are
generally indicative of our relative market share and competitive position.
Questions and Answers About the Rights Offering
What is a right?
Rights give our shareholders the privilege to purchase additional shares of
our common stock for $4.00 per share. On , 2000, the last reported
sales price for our common stock on the over-the-counter market was $
per share.
We have granted our shareholders as of 5:00 p.m. on April 20, 2000, 0.389
rights for every share of common stock owned at that time. Each whole right
entitles you to purchase one share of common stock for $4.00. For example,
if you owned 100 shares on the record date, you have the right to purchase
38 shares of common for $4.00 per share.
Will I receive fractional rights or shares?
We are not issuing fractional rights or shares. If the number of shares of
common stock you held on the record date would result in your receipt of
fractional rights, the number of rights issued to you is being rounded down
to the nearest whole right. As a result, our shareholders of record that
held fewer than three shares of common stock as of April 20, 2000 are not
receiving rights.
Why is Dynatech offering the rights?
To finance the merger of one of our subsidiaries with Wavetek Wandel
Goltermann, Inc. ("WWG"), a designer and manufacturer of communications
test equipment and systems, we were required to raise substantial debt and
equity financing in a short amount of time. As a result, we entered into a
new credit facility with a syndicate of lenders. Our new credit facility
provides for borrowings of up to $860 million, as opposed to the $370
million provided for by our previous credit facility. In addition, in order
to obtain such debt financing, concurrently with the merger we sold 12.5
million and 30.625 million newly-issued but unregistered shares of our
common stock to Clayton, Dubilier & Rice Fund V Limited Partnership and
Clayton, Dubilier & Rice Fund VI Limited Partnership, respectively, for
$4.00 per share. Our sale of unregistered common stock to the Clayton,
Dubilier & Rice funds allowed us to raise the cash equity we needed within
the time frame required to consummate the WWG merger and to obtain our new
credit facility. However, as a result of our sale of common stock to the
Clayton, Dubilier & Rice funds, the percentage equity ownership interest in
Dynatech of our other shareholders was diminished. Now that the WWG merger
is complete, we are conducting this offering so that such shareholders may,
at their option, reverse the diminution of their percentage equity
ownership interest of Dynatech by purchasing newly-issued shares of our
common stock at the same price per share that was paid by the Clayton,
Dubilier & Rice funds.
1
<PAGE>
We will use the net proceeds of this offering for potential acquisitions
and other general corporate purposes.
What is the basic subscription privilege?
By exercising the rights, you may purchase one newly-issued share of common
stock for every whole right held by you, at the subscription price of $4.00
per share. This is your "basic subscription privilege."
What is the oversubscription privilege?
If you fully exercise your basic subscription privilege, the
oversubscription privilege entitles you to subscribe to additional shares
of our common stock at the same subscription price of $4.00 per share that
applies to your basic subscription privilege.
What are the limitations on the oversubscription privilege?
We will be able to satisfy your exercise of the oversubscription privilege
only if our other shareholders receiving rights do not elect to purchase
all of the shares offered under their basic subscription privilege. We will
honor oversubscription requests in full to the extent sufficient shares are
available following the exercise of rights under the basic subscription
privilege. If oversubscription requests exceed shares available, we will
allocate the available shares pro rata among our shareholders that
oversubscribed.
What is the role of the standby purchaser in this offering?
As standby purchaser, Clayton, Dubilier & Rice Fund VI Limited Partnership
will purchase all of the shares of our common stock offered in this
offering but not purchased by our other shareholders under their basic
subscription and oversubscription privileges.
Has the Board of Directors made a recommendation regarding this offering?
Our Board of Directors makes no recommendation to you about whether you
should exercise any rights.
How soon must shareholders act?
The rights expire on , 2000, at 5:00 p.m., New York City time. The
subscription agent must actually receive all required documents and
payments before that date and time. Although we have the option of
extending the expiration date, we currently do not intend to do so.
May I transfer my rights?
No. The rights may be exercised only by the person to whom they are
granted.
Am I required to subscribe in the rights offering?
No. You are not required to exercise any rights, purchase any new shares,
or otherwise take any action in response to this rights offering.
2
<PAGE>
What will happen if I do not exercise my rights?
If you do not exercise any rights, the number of shares you own will not
change, but your percentage ownership of Dynatech will decline following
the rights offering.
May I change or cancel my exercise of rights after I send in the required
forms?
No. All exercises of rights are irrevocable.
Will my money be returned if the rights offering is cancelled?
We may cancel or terminate the rights offering at any time prior to the
expiration date. If we terminate or cancel this offering, we will return
your subscription price, but without any payment of interest.
What should I do if I want to participate in the rights offering, but my shares
are held in the name of my broker, dealer or other nominee?
If you hold your shares of our common stock through a broker, dealer or
other nominee (for example, through a custodian bank), then your broker,
dealer or other nominee is the record holder of the shares you own. This
record holder must exercise the rights on your behalf for shares you wish
to purchase. Therefore, you will need to have your record holder act for
you.
If you wish to participate in the rights offering and purchase shares,
please promptly contact the record holder of your shares. To indicate your
decision with respect to your rights, you should complete and return to
your record holder the form entitled "Beneficial Owner Election Form." You
should receive this form from your record holder with the other rights
offering materials.
What fees or charges apply if I purchase shares?
We are not charging any fee or sales commission to issue rights to you or
to issue shares to you if you exercise rights. If you exercise rights
through a record holder of your shares, you are responsible for paying any
fees that person may charge.
How do I exercise my rights? What forms and payment are required to purchase
shares?
As a record holder of our common stock on April 20, 2000, you are receiving
this prospectus, a subscription warrant evidencing your subscription rights
and instructions on how to purchase shares. If you wish to participate in
this rights offering, then before your rights expire, you must:
. deliver the subscription price by wire transfer of immediately
available funds, certified or cashier's check drawn on a U.S. bank,
or personal check that clears before expiration of the rights; and
. deliver a properly completed subscription warrant. The instructions
also describe an alternate procedure called "Notice of Guaranteed
Delivery," which allows an extra three days to deliver the
subscription warrant if full payment is received before the
expiration date and a securities broker or qualified financial
institution signs the "Notice of Guaranteed Delivery" form to
guaranty that your properly completed subscription warrant will be
timely delivered.
3
<PAGE>
To whom should I send forms and payment?
You should send your subscription documents and payment by mail or courier
service to:
<TABLE>
<S> <C> <C>
By Hand: By First Class Mail: By Overnight Courier:
Securities Transfer & Equiserve Trust Company, N.A. Equiserve Trust Company, N.A.
Reporting Services, Inc. Attn: Corporate Actions Attn: Corporate Actions
c/o Equiserve Trust Company, N.A. PO Box 9573 40 Campanelli Drive
100 William Street, Galleria Boston, MA 02205-9573 Braintree, MA 02184
New York, NY 10038
</TABLE>
For instructions on how your subscription payment should be sent to
Equiserve Trust Company, N.A., see "The Rights Offering--Required Forms of
Payment of Subscription Price" on page 27.
Securities brokers and other qualified financial institutions can use an
alternate procedure called "Notice of Guaranteed Delivery." See "The Rights
Offering--Special Procedure under "Notice of Guaranteed Delivery' Form" on
page 28.
What should I do if I have other questions?
If you have questions, need additional copies of offering documents or
otherwise need assistance, please contact the information agent for the
offering:
Mackenzie Partners Inc.
156 Fifth Avenue
New York, NY 10010
Telephone: 1 (800) 322-2885 (toll-free)
To ask other questions or to receive copies of our recent SEC filings, you
can also contact us by mail or telephone, or refer to the other sources
described under "Where You Can Find More Information" on the inside front
cover of this prospectus.
4
<PAGE>
Our Company
We were founded in 1959 by two Massachusetts Institute of Technology
professors. We became a publicly held company in 1968 as a result of a merger
with a publicly held laboratory equipment manufacturer. On May 21, 1998, we
merged with an entity formed by Clayton, Dubilier & Rice Fund V Limited
Partnership. As a result of this merger, Clayton, Dubilier & Rice Fund V
Limited Partnership became our controlling shareholder, and only approximately
7% of our outstanding common stock remained in the hands of our public
shareholders.
On , 2000, we merged with Wavetek Wandel Goltermann, Inc. ("WWG"),
a designer and manufacturer of communications test equipment and systems, and
combined WWG with our TTC (formerly Telecommunications Techniques Co., LLC)
("TTC") subsidiary. Our management believes that the combined TTC-WWG division
is the world's second largest (by sales) provider of communications test
equipment and systems and related services. For more information regarding our
merger with WWG, see "Recent Transactions" below.
Our company develops, manufactures and markets communications equipment in
three categories:
. Communications test. This category accounted for 51% of our sales (or
approximately $241.4 million) for the nine months ended December 31,
1999. Adjusted for the WWG merger and other acquisitions and
divestitures, sales of our communications test products represented 71%
of our total sales (or approximately $632 million) for the nine months
ended December 31, 1999, on a pro forma basis;
. Industrial computing and communications. This category accounted for 34%
of our sales (or approximately $160.3 million) for the nine months ended
December 31, 1999. Adjusted for the WWG merger and other acquisitions
and divestitures, sales of our industrial computing and communications
products represented 21% of our total sales (or approximately $185
million) for the nine months ended December 31, 1999 on a pro forma
basis; and
. Visual communications. This category accounted for 15% of our sales (or
approximately $75.4 million) for the nine months ended December 31,
1999. Adjusted for the WWG merger and other acquisitions and
divestitures, sales of our visual communications products represented 8%
of our total sales (or approximately $73 million) for the nine months
ended December 31, 1999, on a pro forma basis.
Communications Test
Our communications test equipment business manufactures and markets a broad
range of communications test solutions used in the planning, deploying,
provisioning, manufacturing, managing and maintaining of communications
equipment and networks. These solutions are designed to increase the
productivity of our customers and allow them to deliver higher quality services
to their customers. Our products range from portable instruments to systems and
software that address the need for automated remote testing and service
assurance. These products are used to test existing and emerging copper and
fiber-optic based technologies used to carry voice and data signals such as
Digital Subscriber Line, Asynchronous Transfer Mode, Synchronous Optical
Network, Synchronous Digital Hierarchy, and Dense Wave Division Multiplexing.
We also make products for testing cable television and wireless networks.
We estimate the worldwide communications test market to be $6.7 billion, of
which $3.6 billion is for communications test instruments and the remaining
$3.1 billion is for communications systems and software. It is a highly
fragmented market with more than 80 competitors having annual sales greater
than $1 million. Within many segments of this market, we believe we are the
number one or number two provider, with shares in some segments of 30 to 40
percent.
5
<PAGE>
Among the factors we believe are driving growth in the communications test
market are deregulation in the telecommunications industry, global deployment
of communications products and services, new high-speed technologies and a
shift toward automated network testing and monitoring. Growth of data traffic,
in part due to increasing numbers of Internet users, is changing how
communications networks are managed and maintained. In order to meet the demand
for Internet, wireless and CATV services, companies and governments in North
America and Europe, as well as in developing countries, are making significant
investments to build the necessary network infrastructure. The growth of
Internet and wireless communications is also fueling the development of new
high-speed communications services, and with it the need for error-free
transmission. We believe this increasing need for error-free transmission has
enhanced demand for communications test equipment.
In this market environment, our management believes that our merger with WWG
will enhance our competitive position by providing us with the following
benefits:
. The number two position in the $6.7 billion worldwide communications
test market, with a market share more than three times that of our
nearest competitor;
. Broader product offerings to cover existing and emerging technologies;
. A global sales and distribution network, with a presence in over 80
countries spanning North America, Europe, Asia and Latin America;
. The aggregate research and development funding and engineering talent to
stay on pace with rapidly changing technologies; and
. The opportunity to cross-sell of products in complementary channels and
other efficiencies in sales and marketing.
A key factor in the success of our communications test business is our long-
standing and close relationships with our customers. These relationships are
facilitated by our highly-trained, experienced sales force. We sell our
communications test equipment to three types of customers:
. Communications service providers, which include regional Bell operating
companies, long-distance companies, competitive access providers, global
service providers, cable network operators, wireless communications
providers and public telephone and telegraph companies outside the
United States;
. Service users, such as large corporate and government network operators;
and
. Manufacturers of communications equipment and systems.
Industrial Computing and Communications
This business consists of two subsidiaries addressing different areas of the
ruggedized computer market. Our ICS-Advent subsidiary ("ICS") designs,
configures and sells a broad range of industrial computers, input/output
devices, communications and accessory products to the industrial, commercial,
scientific, and Internet telephony computing market. ICS is deploying a
marketing strategy that uses direct sales, channel partners and Internet and
direct marketing to address different volume and technical requirements in its
market. Our Itronix Corporation ("Itronix") subsidiary sells rugged, portable
communications and computing devices used by the field-service employees of
telephone companies, utilities, insurance companies and other organizations
with large field-service workforces.
Visual Communications
Our visual communications business consists principally of two market-
leading, niche-focused subsidiaries. Our AIRSHOW, Inc. subsidiary ("AIRSHOW")
is the world leader in passenger cabin video information display systems and
information services for the general and commercial aviation markets. Our da
Vinci Systems, Inc. subsidiary ("da Vinci") is the world leader in digital
color enhancement systems used in the production of television commercials and
programming.
6
<PAGE>
Business Strategy
We intend to pursue the following strategies:
. Leverage Leading Market Positions. We believe that our leading market
positions provide us with several competitive advantages in comparison
to smaller market participants, particularly in our communications test
equipment and services business, and position us to expand our
businesses by:
. Spreading product development costs over a larger sales and unit
base;
. Leveraging our sales and marketing resources and customer
relationships to sell new and enhanced products through established
channels; and
. Taking advantage of our high installed base of instruments to
generate incremental sales for product enhancements, upgrades,
replacements and service.
. Address New Market Segments. We intend to continue to develop products
that address new market segments in each of our businesses and thereby
expand the size of our total served market. With product line extensions
and additions, we can expand the size of our served market while
leveraging our extensive sales and distribution network.
. Utilize Strategic Acquisitions. We intend to continue to pursue
strategic acquisitions that complement our existing businesses and
further expand our product lines and technological capabilities. The
communications test equipment market is highly fragmented, which
management believes may provide significant opportunities for future
strategic acquisitions. In the past two years, we have successfully
acquired and integrated several smaller companies. See "Strategic
Acquisitions" below.
. Increase International Penetration. The merger with WWG significantly
expanded our presence outside of North America and we see continued
opportunities to increase our worldwide sales of our communications test
products. We believe that our strong global organization with the
ability to deliver local service and support is key to increasing our
international penetration. In addition, we believe there are significant
opportunities for our other businesses to expand internationally.
Recent Transactions
Merger with WWG and Sale of Common Stock to Clayton Dubilier & Rice Fund V
Limited Partnership and Clayton Dubilier & Rice Fund VI Limited Partnership
On , 2000, we merged with WWG, a leading designer and manufacturer
of a comprehensive range of communications test equipment and systems. We
acquired WWG to grow our communications test equipment and services business,
which, prior to the merger, was conducted solely by our TTC subsidiary.
Management believes that our combined TTC-WWG business will be the world's
second largest (by sales) provider of communications test equipment and systems
and related services.
To finance the WWG merger, we were required to raise substantial debt and
equity financing in a short amount of time. As a result, we entered into a new
credit facility with a syndicate of lenders. Our new credit facility provides
for borrowings of up to $860 million, as opposed to the $370 million provided
for by our previous credit facility. In addition, in order to obtain such debt
financing, concurrently with the merger we sold 12.5 million and 30.625 million
newly-issued but unregistered shares of our common stock to Clayton, Dubilier &
Rice Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited
Partnership, respectively, for $4.00 per share. Our sale of unregistered common
stock to the Clayton, Dubilier & Rice funds allowed us to raise the shareholder
equity we needed within the time frame required to consummate the WWG merger
and to facilitate the establishment of our new credit facility.
7
<PAGE>
In connection with the WWG merger and the concurrent establishment of our
new credit facility, we incurred approximately $50 million of transaction
related fees and expenses, including $6 million payable to Clayton, Dubilier &
Rice, Inc., an investment firm that directs the management of Clayton, Dubilier
& Rice Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited
Partnership, our controlling shareholders.
Strategic Acquisitions
WPI Husky Computer, Inc., WPI Husky Computers Limited, WPI Oyster Termiflex
Limited. On February 24, 2000, we acquired, through one of our subsidiaries,
certain assets and liabilities of subsidiaries of WPI, Inc. (the "WPI
Businesses"). The total purchase price for the WPI Businesses was approximately
$35 million. Based in the United Kingdom, the WPI Businesses manufacture rugged
mobile computer products similar to those sold by our Itronix subsidiary. The
products are used by field-service personnel in a variety of applications,
including meter reading, stock control, shipping and transport logistics and
systems/equipment maintenance. The WPI Businesses have extensive distribution
networks in Europe, Africa and Asia, and our management expects them to add to
the geographic sales reach of our Itronix subsidiary, which currently sells
primarily in the United States.
ICS Advent UK. On January 4, 2000, we purchased the remaining outstanding
stock of ICS Advent (Europe) Ltd. ("ICSUK"). We previously owned 25% of ICSUK.
ICSUK is primarily a distributor of mission-critical computer systems to the
defense, factory-automation, data and telecommunications markets within Europe,
as well as a distributor of rack-mounted computers supplied by our ICS Advent
subsidiary.
Applied Digital Access, Inc. On November 1, 1999, we acquired, through one
of our subsidiaries, all of the outstanding capital stock of Applied Digital
Access, Inc. ("ADA") for approximately $81 million. ADA, which is headquartered
in San Diego, California, is a provider of network performance management
products that include systems, software and services used to manage the
quality, performance, availability and reliability of telecommunications
service providers' networks.
Sierra Design Labs. On September 10, 1999, through one of our subsidiaries
we purchased Sierra Design Labs ("Sierra") for approximately $6 million. Sierra
designs, manufactures and markets uncompressed, real-time videodisk recorders
and is included in our visual communications business.
State and Date of Incorporation and Address
Prior to 1999, we were incorporated in Massachusetts. Since 1999 we have
been incorporated in Delaware. Our principal executive offices are at 3 New
England Executive Park, Burlington, Massachusetts 01803-5087. Our telephone
number is 1 (781) 272-6100.
8
<PAGE>
Summary of the Terms of the Rights Offering
Further details concerning this part of the summary are set forth under "The
Rights Offering" beginning on page 24. Only holders of record of common stock
at the close of business on the record date stated below may exercise rights.
Securities Offered....... We are offering 4,983,043 shares of common stock to
be issued upon exercise of the rights.
Subscription Ratio;
Basic Subscription 0.389 rights for every share of common stock owned
Privilege................ as of the record date. Each whole right entitles you
to purchase one share of common stock for the
subscription price.
We are not issuing any fractional rights or
fractional shares. If the number of shares of common
stock you held of record on the record date would
result in your receipt of fractional rights, the
number of rights issued to you is being rounded down
to the nearest whole right. So, for example, if you
were the record holder of fewer than three shares of
common stock on the record date, you are not
receiving rights. If, however, you were the record
holder of 100 shares of common stock on the record
date, you are receiving rights to subscribe to 38
shares instead of 38.9 shares.
You may not purchase fractional shares. You may,
however, subscribe for any whole number of shares by
exercising less than all of your rights.
Subscription Price....... $4.00 per share, payable in cash. All payments must
be cleared on or before the expiration date.
Oversubscription If you fully exercise your basic subscription
Privilege................ privilege, you may also purchase additional shares
of common stock that are not purchased by other
shareholders. The same subscription price of $4.00
per share applies to this purchase. If there are not
enough shares available to fill all subscriptions
for additional shares, the available shares will be
allocated pro rata based on the number of shares
each subscriber for additional shares has purchased
under the basic subscription privilege.
Record Date.............. April 20, 2000 at 5:00 p.m. (New York City time).
Only our shareholders of record as of the record
date will receive rights to subscribe for new shares
of common stock.
Expiration Date.......... The rights expire on , 2000 at 5:00 p.m. (New
York City time). Rights not exercised by the
expiration date will be null and void. We have the
option of extending the expiration date for any
reason.
Use of Proceeds.......... We will use the net proceeds of this offering for
potential acquisitions and other general corporate
purposes.
9
<PAGE>
No Transferability of The rights may be exercised only by the persons to
Rights................... whom they are granted.
No Board
Recommendation........... Our Board of Directors does not make any
recommendation to shareholders regarding the
exercise of rights in this offering.
Shareholders who do exercise rights risk investment
loss on new money invested. We cannot assure you
that the subscription price will remain below any
trading price for our common stock or that its
trading price will not decline to below the
subscription price during or after the rights
offering. For more information regarding some of the
risks inherent in this rights offering, please see
"Risk Factors" beginning on page 16.
Commitment of Clayton,
Dubilier & Rice Fund V
Limited Partnership to
Refrain from Purchasing
Shares in this
Offering.................
To finance our merger with WWG, we were required to
raise substantial debt and equity financing in a
short amount of time. As a result, we entered into a
new credit facility with a syndicate of lenders. Our
new credit facility provides for borrowing of up to
$860 million, as opposed to the $370 million
provided for by our previous credit facility. In
addition, in order to obtain such debt financing,
concurrently with the WWG merger, we sold 12.5
million and 30.625 million newly-issued but
unregistered shares of our common stock to Clayton,
Dubilier & Rice Fund V Limited Partnership and
Clayton, Dubilier & Rice Fund VI Limited
Partnership, respectively, for $4.00 per share. Our
sale of unregistered common stock to the Clayton,
Dubilier & Rice funds allowed us to raise the
shareholder equity we needed within the time frame
required to consummate the WWG merger and to obtain
our new credit facility. However, as a result of our
sale of common stock to the Clayton, Dubilier & Rice
funds, the percentage equity ownership interest in
Dynatech of our other shareholders was diminished.
Now that the WWG merger is complete, we are
conducting this offering so that such shareholders
may, at their option, reverse the diminution of
their percentage equity ownership interest of
Dynatech by purchasing newly-issued shares of our
common stock at the same price per share that was
paid by the Clayton, Dubilier & Rice funds.
Accordingly, Clayton, Dubilier & Rice Fund V Limited
Partnership has agreed to refrain from exercising
any rights to purchase common stock received by it
in this offering, and Clayton, Dubilier & Rice Fund
VI Limited Partnership, which was not one of our
shareholders prior to the WWG merger, will not
receive rights to purchase common stock in this
rights offering.
Standby Purchaser........ Clayton, Dubilier & Rice Fund VI Limited
Partnership, which purchased [ ]% of our
outstanding common stock in connection with the WWG
merger, has agreed to purchase all of the shares of
our common stock that are offered in this rights
offering but not purchased by our other
shareholders. If no other shareholders exercise
their rights under this offering, Clayton, Dubilier
& Rice Fund VI Limited
10
<PAGE>
Partnership's percentage equity ownership of
Dynatech will increase to approximately [ ] %.
No Revocation............
If you exercise any rights, you are not allowed to
revoke or change your exercise or request a refund
of monies paid.
Certain Federal Income
Tax Consequences......... For United States federal income tax purposes, we
believe that a shareholder will not recognize
taxable income upon the receipt or exercise of
rights. See "Certain Federal Income Tax
Consequences" beginning on page 44. Each shareholder
should consult the holder's own tax adviser
concerning the tax consequences of this offering
under the holder's own tax situation. This
prospectus does not summarize tax consequences
arising under state tax laws, non-U.S. tax laws, or
any tax laws relating to special tax circumstances
or particular types of taxpayers.
Extension, Withdrawal
and Amendment............ We have the option of extending this rights offering
and the subscription period, although we presently
do not intend to do so. We also reserve the right to
withdraw, terminate or amend this rights offering at
any time for any reason. If this offering is
withdrawn or terminated, or any submitted
subscriptions no longer comply with the amended
terms of the offering, we will return all funds
received from such subscriptions (without interest).
Procedure for Exercising To exercise rights, you must complete the
Rights................... subscription warrant and deliver it to the
subscription agent, Equiserve Trust Company, N.A.,
with full payment for all the rights you elect to
exercise. Equiserve Trust Company, N.A. must receive
the proper forms and payments on or before the
expiration date.
You may deliver your subscription documents and
payments by mail or commercial courier. If regular
mail is used for this purpose, we recommend using
insured, registered mail. You may use an alternative
"Notice of Guaranteed Delivery" procedure if you are
unable to deliver the subscription warrant before
the expiration date, subject to the requirements of
this procedure described under "The Rights
Offering--Special Procedure under "Notice of
Guaranteed Delivery' Form" on page 28.
Shares of Common Stock
Outstanding Before the
Rights Offering..........
.
Shares of Common Stock
Outstanding Upon
Completion of Rights
Offering................. .
11
<PAGE>
Risk Factors
Exercising your rights and purchasing our common stock involves a high
degree of risk. You should carefully read and consider the information set
forth under "Risk Factors" beginning on page 16 and the other information
contained in this prospectus.
12
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
The summary historical financial data set forth below for the nine months
ended December 31, 1998 and 1999 and the balance sheet data as of December 31,
1999 are derived from the unaudited consolidated financial statements and notes
incorporated by reference herein and, in the opinion of our management, include
all adjustments (consisting of only normal recurring adjustments) considered
necessary for a fair presentation. The summary historical financial data set
forth below for each of the years in the three-year period ended March 31, 1999
are derived from the consolidated financial statements and notes incorporated
by reference herein, which have been audited by PricewaterhouseCoopers LLP,
independent accountants.
The pro forma data set forth in this summary give effect to the following:
. Our merger with WWG (giving effect to the divestitures, which took place
in January and February 2000, of certain of WWG's operating divisions);
. Our sale, in connection with the WWG merger, of 43,125,000 newly-issued
but unregistered shares of our common stock to Clayton, Dubilier & Rice
Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited
Partnership and the concurrent establishment of our new credit facility;
. This rights offering; and
. Our acquisitions of Pacific Systems Corporation, Sierra Design Labs,
Applied Digital Access, Inc. and certain assets and liabilities of WPI,
Inc., and our divestitures of ComCoTec, Inc., Parallax, Inc. and
DataViews Corporation.
The unaudited pro forma balance sheet data set forth in this summary were
prepared assuming that the above-listed transactions took place on December 31,
1999. The unaudited pro forma financial data for the nine months ended December
31, 1999 and the fiscal year ended March 31, 1999 set forth in this summary
were prepared assuming that the above-listed transactions occurred as of the
first day of each of the periods presented. The pro forma adjustments are based
on currently available information and certain adjustments that management
believes are reasonable. The data presented in this summary are for
informational purposes only and do not necessarily represent what our financial
position or results of operations would have been if the above-listed
transactions had in fact occurred on the dates indicated and are not
necessarily indicative of our financial position or results of operations for
any future period.
13
<PAGE>
Summary Financial Data
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
Year Ended March 31, (unaudited)
---------------------------------------- -----------------------------
Pro Forma Pro Forma
1997 1998 1999 1999 1998 1999 1999
-------- -------- -------- ---------- -------- -------- ---------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net revenues............ $362,412 $472,948 $522,854 $1,037,543 $369,525 $477,125 $890,265
Gross profit............ 225,158 267,426 294,282 591,282 210,657 271,225 515,649
Operating profit........ 32,843 68,286 40,120 33,709 13,774 66,230 61,067
Interest expense........ (828) (1,221) (46,198) (89,819) (33,106) (38,433) (70,591)
Income from continuing
operations before
income taxes and
extraordinary item..... 35,434 70,807 13,279 (55,933) (837) 29,682 (9,079)
Income from continuing
operations before
extraordinary items.... 17,849 41,776 6,445 (59,571) (1,323) 16,870 (25,425)
Income from discontinued
operations............. 12,000 -- -- -- -- -- --
Net income.............. $ 29,849 $ 41,776 $ 6,445 $ (59,571) $ (1,323) $ 16,870 $(25,425)
Net income per share
(basic)................ $ 1.74 $ 2.49 $ 0.06 $ (0.32) $ (0.01) $ 0.14 $ (0.14)
Net income per share
(diluted).............. $ 1.66 $ 2.40 $ 0.06 $ (0.32) $ (0.01) $ 0.13 $ (0.14)
Other Data:
Capital expenditures.... 10,176 15,879 11,323 30,649 7,425 12,960 26,429
Depreciation and
amortization........... 16,073 17,901 17,969 104,374 13,571 16,156 75,855
</TABLE>
<TABLE>
<CAPTION>
As of
As of December 31,
As of March 31, December 31, (unaudited)
--------------------------- (unaudited) Pro Forma
1997 1998 1999 1999 1999
-------- -------- --------- ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data (at
end of period):
Cash and cash
equivalents............ $ 39,782 $ 64,904 $ 70,362 $ 39,016 $ 101,905
Total assets............ 250,035 288,130 348,104 406,997 1,287,226
Total debt.............. 5,427 233 527,342 566,596 993,581
Total equity (deficit).. 160,686 202,119 (316,440) (300,331) 6,757
</TABLE>
14
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. All statements other
than statements of historical facts included in this prospectus may constitute
forward-looking statements. We have based these forward-looking statements on
our current expectations and projections about future events. Although we
believe that our assumptions made in connection with the forward-looking
statements are reasonable, we cannot assure you that our assumptions and
expectations will prove to have been correct. Important factors that could
cause our actual results to differ from our expectations are disclosed in this
prospectus, including factors disclosed under "Risk Factors" beginning on page
16. These forward-looking statements are subject to various risks,
uncertainties and assumptions including, among other things:
. Our outstanding indebtedness and our leverage, and the restrictions
imposed by our indebtedness;
. The cyclical nature of certain of our businesses, and domestic and
international economic conditions;
. The high degree of competition in certain of our businesses, and the
potential for new competitors to enter into those businesses;
. The integration of recent and future acquired businesses with our
existing operations in a timely and efficient manner;
. The extent to which we undertake new acquisitions or enter into strategic
joint ventures or partnerships;
. Future modifications to existing laws and regulations;
. Discovery of unknown contingent liabilities, including environmental
contamination at our facilities;
. Fluctuations in interest rates and in foreign currency exchange rates;
and
. Increases in the cost of raw materials and other inputs used to make our
products.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
15
<PAGE>
RISK FACTORS
You should carefully consider the risks described below and the other
information in this prospectus before deciding to purchase shares in the rights
offering. Our shares are subject to significant investment risks. Many factors,
including the risks described below and other risks we have not recognized,
could cause our operating results to differ from our expectations and plans.
There are risks related to this offering that could result in substantial
losses for investors who exercise their rights.
Stock Market Risks.
. Decline in Our Stock Price. The subscription price in this rights
offering represents a discount to the market price of our common stock on
the date it was determined. The trading price of our common stock may
decline to below the subscription price. We cannot assure you that the
subscription price will remain below any trading price for our common
stock or that the trading price of our common stock will not decline to
below the subscription price during or after this rights offering.
. Future Market Price of Our Stock. Future prices of our stock may be
affected positively or negatively by our future revenues and earnings,
changes in estimates by analysts and our ability to meet such estimates,
speculation in the trade or business press about our company, and overall
conditions affecting our businesses, economic trends and the securities
markets.
Procedural Risks.
No Revocation. You are not allowed to revoke or change your exercise of
rights after you send in your subscription forms and payment. If we cancel this
rights offering, we are obligated only to refund payments actually received,
without interest.
Need to Act Promptly and Follow Subscription Instructions. Shareholders who
desire to purchase shares in this rights offering must act promptly to ensure
that all required forms and payments are actually received by the subscription
agent, Equiserve Trust Company, N.A., prior to the expiration date. If you fail
to complete and sign the required subscription forms, send an incorrect payment
amount, or otherwise fail to follow the subscription procedures that apply to
your desired transaction, Equiserve Trust Company, N.A. may, depending on the
circumstances, reject your subscription or accept it to the extent of the
payment received. Neither Dynatech nor Equiserve Trust Company, N.A. undertakes
to contact you concerning, or attempt to correct, an incomplete or incorrect
subscription form or payment. We have the sole discretion to determine whether
a subscription exercise properly follows the subscription procedures.
Risk of Personal Checks. Any personal check used to pay for shares must
clear prior to the expiration date, and the clearing process may require five
or more business days.
If you do not exercise your rights, your relative ownership interest in
Dynatech will be diluted.
If you choose not to exercise your subscription rights in full, your
relative ownership interest in Dynatech will be diluted. In addition, because
the subscription price represents a discount from the prevailing market price
of our common stock, shareholders who choose not to exercise their subscription
rights could experience dilution of their economic interest in Dynatech.
16
<PAGE>
While we expect to realize a number of synergies as a result of our merger with
WWG, we only recently began the process of integrating the operations of WWG
with ours and may encounter unanticipated difficulties or costs during the
integration process.
Management believes we will be able to realize a number of synergies as a
result of our merger with WWG, including the opportunity to use WWG's extensive
sales network and strong relationships with communications test equipment and
systems customers in Europe, Asia and Latin America and to expand our product
line. The merger, however, presents us with significant challenges; among other
things, it reflects a major commitment to geographic markets outside North
America where we have had relatively little experience. Therefore, there can be
no assurance that difficulties in integrating the operations of WWG with ours
will not arise or that the strategic and commercial benefits expected from the
merger will actually be realized. The successful integration of WWG and
implementation of our operating strategy after the merger could require
substantial resources and attention from our management team. If currently
unanticipated costs or difficulties arise, the merger could have a materially
adverse effect on our results of operations or financial condition.
We are controlled by our principal shareholders, whose interests may not be
aligned with those of other shareholders.
Clayton, Dubilier & Rice Fund V Limited Partnership and Clayton, Dubilier &
Rice Fund VI Limited Partnership, our controlling shareholders, hold
approximately [ ]% and [ ]%, respectively, of the outstanding shares of our
common stock. The Clayton, Dubilier & Rice funds have the power to elect our
directors, no matter how our other shareholders may vote, to appoint new
management and approve any action requiring the approval of our stockholders,
including adopting certain amendments to our certificate of incorporation and
approving our merger or the sale of all or substantially all of our assets.
There can be no assurance that the interests of the Clayton, Dubilier & Rice
funds will not conflict with the interests of our other shareholders. Clayton,
Dubilier & Rice Fund V Limited Partnership has agreed, pursuant to certain
employment agreements with Messrs. Allan M. Kline, our Corporate Vice
President, Chief Financial Officer and Treasurer, and John R. Peeler, our
Corporate Vice President, to vote its shares to elect both men as directors so
long as they are employed by us.
Although our common stock is available on the over-the-counter-market, it is
not listed on a national or regional securities exchange and is thinly traded.
Our stock price may fluctuate more than the stock market as a whole.
As a result of the thin trading market for our common stock, its market
price may fluctuate significantly more than the stock market as a whole or the
stock prices of our publicly traded peer companies. Of the [ ] shares of our
outstanding common stock after our sale of newly-issued but unregistered shares
to Clayton, Dubilier & Rice Find V Limited Partnership and Clayton, Dubilier &
Rice Fund VI Limited Partnership and our issuance of newly-issued shares of our
common stock to certain WWG stockholders in connection with the WWG merger,
only approximately 8% of our outstanding common stock is owned by persons or
entities other than the Clayton, Dubilier & Rice funds or former WWG
stockholders. Without a larger float and a listing on a national or regional
exchange, our common stock will be less liquid than the stock of companies with
broader public ownership and, as a result, the trading prices for our common
stock may be more volatile. Among other things, trading of a relatively small
volume of our common stock may have a greater impact on the trading price for
our stock than would be the case if our public float were larger.
In addition, sales of a substantial amount of our outstanding common stock
in the public market, or the perception that these sales may occur, could
adversely affect the market price of our common stock prevailing from time to
time. Possible or actual sale of any of these shares, particularly by our
controlling shareholders or former WWG stockholders, may decrease the market
price of shares of our common stock.
The risks associated with the thin trading market for our common stock may
be mitigated in the future, however, should we offer and sell newly-issued
shares of our common stock in a registered public offering.
17
<PAGE>
Our substantial indebtedness could adversely affect our financial condition.
We are highly leveraged, with indebtedness that is very substantial in
relation to our stockholders' equity. As of March 31, 2000, we had a total of
approximately $580 million of debt outstanding. This outstanding debt
consisted primarily of $275 million of our 9 3/4% Senior Subordinated Notes
due 2008, $70 million under our revolving credit facility and $235 million
under our term loan facility. As a result of the WWG merger, however, our
outstanding debt is now approximately $994 million consisting of $275 million
of our 9 3/4% Senior Subordinated Notes due 2008, $685 million of term loans
outstanding under our new credit facility and approximately $34 million of
other debt. Our revolving credit facility, which permits borrowings of up to
$175 million, matures in 2006. Approximately $175 million of our indebtedness
under our term loan facility matures in 2006. The remaining $510 million
matures in 2007.
Our high debt levels may have important consequences for us, including, but
not limited to, the following:
. Our ability to obtain additional financing to fund future acquisitions,
meet our working capital needs, fund future capital expenditures or use
for other purposes may be impaired, or any such financing may not be on
terms favorable to us;
. A substantial amount of our operating cash flow is dedicated to the
payment of principal and interest on our indebtedness, thereby
diminishing funds that would otherwise be available for our operations
and for other purposes, including investments in new products, research
and development, capital spending and acquisitions;
. A substantial decrease in net operating cash flows or an increase in our
expenses could make it difficult for us to meet our debt service
requirements, force us to modify our operations or sell certain of our
assets; and
. Our highly leveraged capital structure may place us at a competitive
disadvantage by hindering our ability to adjust rapidly to changing
market conditions or by making us vulnerable to a downturn in our
business or the economy in general.
Our ability to repay or refinance our indebtedness will depend on our
future financial and operating performance. Our performance, in turn, will be
subject to prevailing economic and competitive conditions, as well as to
financial, business, legislative, regulatory, industry and other factors, many
of which are beyond our control. These factors could include:
. General economic conditions;
. Operating difficulties or increased operating costs;
. Product pricing pressures;
. Revenue instability arising from cost savings initiatives or otherwise;
. Labor difficulties;
. The response of competitors or customers to our business strategy or
projects; and
. Telecommunications provider consolidation or strategy changes.
Our ability to meet our debt service and other obligations may depend in
significant part on the extent to which we can implement successfully our
business and growth strategy. We cannot assure you that we will be able to
implement our strategy fully or that the anticipated results of our strategy
will be realized. If our
18
<PAGE>
cash flow and capital resources are insufficient to fund our debt service
obligations, we may be forced to reduce or delay capital or other expenditures,
sell assets, seek to obtain additional equity capital or refinance or
restructure our debt. We cannot assure you that our cash flow and capital
resources will be sufficient for payment of principal of, premium, if any, and
interest on, our indebtedness in the future, or that any such alternative
measures would be successful or would permit us to meet our scheduled debt
service obligations. In addition, because certain of our obligations bear
interest at floating rates, an increase in interest rates could materially
adversely affect our ability to meet our debt service obligations. See
"Material Changes--Debt Financing in connection with the WWG Merger".
Our debt agreements impose significant operating and financial restrictions,
which may prevent us from capitalizing on business opportunities.
Our debt agreements impose significant restrictions on our operations,
thereby limiting the discretion of management with respect to certain business
matters. These agreements restrict, among other things, our ability to:
. Incur additional indebtedness, guarantee obligations and create liens;
. Pay dividends and make other distributions;
. Prepay or modify the terms of other indebtedness;
. Make certain capital expenditures, investments or acquisitions, or enter
into mergers or consolidations or sales of assets; and
. Engage in certain transactions with affiliates.
Our ability to comply with the restrictions contained in our debt agreements
may be affected by events beyond our control, including prevailing economic,
financial and industry conditions, and there can be no assurance that we will
be able to comply with such restrictions in the future. See "Material Changes--
Debt Financing in connection with the WWG Merger".
The markets in which we operate are highly competitive. We cannot assure you
that we will adapt as quickly as our competitors to changes in these markets,
or be able to raise our prices at the same pace as our costs increase.
The markets for our products are highly competitive. We compete directly or
indirectly with Agilent Technologies, Inc. and Panasonic Industrial Co., among
others. Due to the rapidly evolving markets in which we compete, additional
competitors with significant market presence and financial resources, including
large telecommunications equipment manufacturers and computer hardware and
software companies, may enter our markets, thereby further intensifying
competition. Increased competition could result in price reductions and loss of
market share that would materially adversely affect our business, financial
condition and results of operations.
Certain of our current and potential competitors have greater name
recognition and greater financial, selling and marketing, technical,
manufacturing and other resources than we do. Although we believe that we have
certain technological and other competitive advantages over our competitors,
realizing and maintaining such advantages will require a continued high level
of investment on our part in research and product development, marketing and
customer service and support. Our substantial indebtedness could limit our
ability to continue to make such investments or other necessary or desirable
capital expenditures, to compete effectively and respond to market conditions.
There can be no assurance that we will be able to compete effectively with our
existing competitors or with new competitors, or that such competitors will not
succeed in adapting more rapidly and effectively to changes in technology or in
the market or in developing or marketing products that will be more widely
accepted.
19
<PAGE>
The markets we serve are characterized by rapid change and innovation. We
cannot assure you that we will be able to develop and successfully market
products that account for such changes and innovations.
The market for our products and services is characterized by rapidly
changing technologies, new and evolving industry standards and protocols and
product and service introductions and enhancements that may render our existing
offerings obsolete or unmarketable. Automation in our addressed markets for
communications test equipment or a shift in customer emphasis from employee-
operated communications test to automated test and monitoring systems could
likewise render our existing product offerings obsolete or unmarketable, or
reduce the size of one or more of our addressed markets. In particular,
incorporation of self-testing functions in the equipment currently addressed by
our communications test instruments could render our offerings redundant and
unmarketable. Failure to anticipate or respond rapidly to advances in
technology and to adapt our products appropriately could have a material
adverse effect on our business, financial condition and results of operations.
The development of new, technologically advanced products is a complex and
uncertain process requiring the accurate anticipation of technological and
market trends and the incurrence of substantial research and development costs.
From the beginning of fiscal 1995 through December 31, 1999, we have expended
an average of 11% of our sales revenue (or approximately $271 million) on
product development and, although we expect to maintain similar levels of
product development spending in the future, there can be no assurance that we
will have sufficient free cash flow to do so. Moreover, we cannot assure you
that errors will not be found in our new products or upgrades after
commencement of commercial shipments, resulting in delays in or loss of market
acceptance and sales, diversion of development resources, injury to our
reputation, increased service and warranty costs or payment of compensatory or
other damages, any of which could have a material adverse effect on our
business, financial condition and results of operations.
We serve many customers in the communications industry. As a result, our
operations could be adversely affected by industry consolidation, governmental
regulation and other factors that affect the communications industry in
general.
Our principal customers are regional telephone service operating companies,
competitive access providers, wireless service providers, competitive local
exchange carriers and other communications service providers and industrial
engineers and other users of communications test equipment and ruggedized
computers. The industries of our principal customers are characterized by
intense competition and consolidation. Fewer customers as a result of such
consolidation could create pressure on us to lower our prices. In addition,
governmental regulation of the communications industry could materially
adversely affect our customers and, as a result, materially limit or restrict
our business. We cannot assure you that the current trend toward deregulation
of the telecommunications market, which has resulted in increased competition
among our customers as well as escalating demand on the part of such customers
for our technologies and services, will continue.
Several of our products must comply with significant governmental and industry-
based regulations, certifications, standards and protocols. Such compliance is
costly and time consuming, and there can be no assurance that our products will
continue to meet these standards in the future.
Several of our products must comply with significant governmental and
industry-based regulations, certifications, standards and protocols, some of
which evolve as new technologies are deployed. These regulations,
certifications, standards and protocols include those promulgated by the
Federal Communications Commission, the Underwriters Laboratories and various
foreign jurisdictions. Compliance with such regulations, certifications,
standards and protocols may prove costly and time-consuming for us by, among
other things, presenting barriers to entry in particular markets or reducing
the profitability of our product offerings. Such regulations, certifications,
standards and protocols may also adversely affect the communications industry,
limit the number of potential customers for our products and services or
otherwise
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have a material adverse effect on our business, financial condition and results
of operations. Failure to comply, or delays in compliance, with such
regulations, standards and protocols could delay the introduction of new
products or cause our existing products to become obsolete.
Certain of our products are dependent on inputs and technologies we purchase or
license from sole source vendors and licensors. If we are unable to obtain
these inputs and technologies from such suppliers and licensors in the future,
we may be unable to continue to offer the affected products.
We purchase key inputs and license key technologies from sole source
vendors. There can be no assurance that such inputs will continue to be
produced or that such licensed technology will continue to be made available to
us, or that the price for such inputs and licensed technology will not
significantly increase. If we are unable to obtain sufficient quantities of
these inputs or license these technologies in the future, and, as is likely to
be the case, are unable to rapidly develop alternative sources for these inputs
and technologies, we are likely to face increased costs and delays or
reductions in product shipments which could materially adversely affect our
business, financial condition and results of operations.
The manufacture of the sole source inputs we use in our products is a
technologically complex process, and our reliance on the suppliers of these
inputs exposes us to potential production difficulties and quality variations
which could negatively impact the cost and the timeliness of delivery of our
products. If our supply of these inputs, including, but not limited to,
application-specific integrated circuits, power supplies, display devices and
operating system software, should be significantly interrupted or cease
entirely, we may be required to redesign certain of our products. We cannot
assure you that such supply problems will not occur or, if such problems do
occur, that satisfactory solutions will be available.
Third parties may claim we are infringing their intellectual property and, as a
result of such claims, we could suffer significant litigation or licensing
expenses or be prevented from selling our products.
Third parties may claim that we are infringing their intellectual property
rights and we may be found to infringe those intellectual property rights.
While we do not believe that any of our products infringe the valid
intellectual property rights of third parties, we may be unaware of
intellectual property rights of others that may cover some of our technology,
products and services.
Any litigation regarding patents or other intellectual property could be
costly and time-consuming, and divert the attentions of our management and key
personnel from our business operations. The complexity of the technology
involved and the uncertainty of intellectual property litigation increase these
risks. Claims of intellectual property infringement might also require us to
enter into costly royalty or license agreements. However, we may not be able to
obtain royalty or license agreements on terms acceptable to us, or at all. We
also may be subject to significant damages or injunctions against development
and sale of certain of our products.
Third parties may infringe on our intellectual property and, as a result, we
may expend significant resources enforcing our rights or suffer competitive
injury.
Our success depends in large part on our proprietary intellectual property.
We rely on a combination of patents, copyrights, trademarks and trade secrets,
confidentiality provisions and licensing arrangements to establish and protect
our proprietary intellectual property. If we fail to successfully enforce our
intellectual property rights, our competitive position could suffer, which
could have a material adverse effect on our business, financial condition and
results of operations.
Our pending patent and trademark registration applications may not be
allowed or competitors may challenge the validity or scope of these patent
applications or trademarks registrations. In addition, competitors may design
around our technology or develop competing technologies. Intellectual property
rights may also be unavailable or limited in some foreign countries, which
could make it easier for our competitors to capture market share.
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Our success is dependent upon the quality of our personnel. If we are unable to
retain certain of our personnel, including our senior managers, or if we are
unable to continue to hire highly-skilled personnel, our business may suffer.
Our success depends in large part upon our senior management, as well as our
ability to attract and retain highly-skilled technical, managerial, sales and
marketing personnel, particularly engineers skilled and experienced with
communications equipment. Competition for such personnel is intense and there
can be no assurance that we will be successful in retaining our existing key
personnel or attracting equally skilled people in their stead. Such failure to
retain our personnel, including our senior management, could have a material
adverse effect on our business, financial condition and results of operations.
In addition, continued labor market shortages of technically-skilled personnel
may lead to significant wage increases, which could reduce our overall
profitability.
Our growth strategy contemplates acquisitions and entry into new markets. Such
activities could adversely affect our operating results or result in increased
costs or other problems, such as increased demands on our management and other
personnel and our administrative facilities.
Our future performance depends in part upon our success in implementing our
growth strategy. Our growth strategy is subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
beyond our control. There can thus be no assurance that we will be able to
fully implement our growth strategy or that its anticipated results will be
realized.
Our growth strategy contemplates, among other things, acquisitions of
complementary businesses and entry into new markets. Management cannot predict
the availability of appropriate acquisition candidates or the likelihood of an
acquisition being completed should any appropriate targets be identified or any
negotiations commence. We could, for example, have difficulty obtaining
financing to pursue a potential acquisition. If we do complete one or more
acquisitions, we could have difficulty integrating acquired technology and
operations into our business, or retaining and integrating the key employees of
the businesses we acquire. In any event, integrating one or more acquired
businesses with our business could divert substantial management attention from
other business concerns.
In addition, our future growth, whether by acquisition or otherwise, depends
in part upon our ability to enter new markets, including international markets.
We have limited experience in many such markets. In conducting business in
foreign jurisdictions, we may encounter difficulties with, among other things,
tariffs and other trade or regulatory barriers, currency controls,
hyperinflation, intellectual property protection, potential adverse tax
consequences, longer payment cycles, greater difficulty or delay in accounts
receivable collection, cultural differences and political and economic
instability.
Our planned growth, if achieved, may place significant demands on our
management, administrative and operational resources. In addition, our planned
growth will require us to continue to develop and improve our operational,
financial and other internal systems, as well as our sales capabilities, and to
attract, manage and retain highly-skilled personnel. We cannot assure you that
we will effectively manage our planned growth.
Economic, political and other risks associated with international sales and
operations could adversely affect our sales.
Since we sell our products worldwide, our business is subject to risks
associated with doing business internationally. Our net revenue originating
outside the United States, as a percentage of our total net revenue was
approximately 4% for the twelve months ended March 31, 1999. For the twelve
months ended September 30, 1999, WWG's net revenue originating outside the
United States, as a percentage of total net revenue, was approximately 76%. We
anticipate that revenue from international operations will become a substantial
portion of our total revenue as a result of the WWG merger. In addition, many
of our manufacturing facilities and suppliers are located outside the United
States. Accordingly, our future results could be harmed by a variety of
factors, including:
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. Changes in foreign currency exchange rates;
. Changes in a specific country's or region's political or economic
conditions, particularly in emerging markets;
. Trade protection measures and import or export licensing requirements;
. Potentially negative consequences from changes in tax laws;
. Difficulties in staffing and managing widespread operations;
. Differing protection of intellectual property in disparate jurisdictions;
and
. Unexpected changes in regulatory requirements.
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THE RIGHTS OFFERING
The Rights
As soon as practicable after the date of this prospectus, we are
distributing, at no charge, to holders of our common stock as of 5:00 p.m. (New
York City time) on the record date of April 20, 2000, 0.389 subscription rights
for every share of common stock owned at that time to purchase additional
shares of common stock. Each whole right entitles you to purchase one share of
our common stock for the subscription price. On , 2000, the last reported
sales price for our common stock on the over-the-counter market was $ per
share.
We will not issue fractional rights. If the number of shares of common stock
you held on the record date would have resulted in your receipt of fractional
rights, the number of rights issued to you will be rounded down to the nearest
whole right. As a result, our shareholders that held of record fewer than three
shares as of April 20, 2000 are not receiving rights.
Subscription Price
The subscription price is $4.00 per share, payable in cash. All payments
must be cleared on or before the expiration date.
Basic and Oversubscription Privileges
Basic Subscription Privilege. You are entitled to purchase one share of
common stock at the subscription price for every whole right exercised.
Oversubscription Privilege. If you exercise your basic subscription
privilege in full, you may also subscribe for additional shares that other
shareholders have not purchased under their basic subscription privilege. If
there are not enough shares available to fill all such subscriptions for
additional shares, the available shares will be allocated pro rata based on the
number of shares each subscriber for additional shares has purchased under the
basic subscription privilege. We will not allocate to you more than the number
of shares you have actually subscribed and paid for.
You are not entitled to exercise the oversubscription privilege unless you
have fully exercised your basic subscription privilege. For this purpose, you
would only count the shares you own in your own name, and not other shares that
might, for example, be jointly held with a spouse, held as a custodian for
someone else, or held in an individual retirement account.
You can elect to exercise the oversubscription privilege only at the same
time you exercise your basic subscription privilege in full.
In exercising the oversubscription privilege, you must pay the full
subscription price for all the shares you are electing to purchase. If we do
not allocate to you all of the shares you have subscribed for under the
oversubscription privilege, we will refund by mail to you any payment you have
made for shares which are not available to issue to you, as soon as practicable
after completion of the rights offering. Interest will not be payable on
amounts refunded.
Banks, brokers and other nominees who exercise the oversubscription
privilege on behalf of beneficial owners of shares must report certain
information to Equiserve Trust Company, N.A. and Dynatech and record certain
other information received from each beneficial owner exercising rights.
Generally, banks, brokers and other nominees must report (1) the number of
shares held on the record date on behalf of each beneficial owner, (2) the
number of rights as to which the basic subscription privilege has been
exercised on behalf of each beneficial owner, (3) that each beneficial owner's
basic subscription privilege held in the same capacity has been exercised in
full, and (4) the number of shares subscribed for under the oversubscription
privilege by each beneficial owner.
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If you complete the portion of the subscription warrant to exercise the
oversubscription privilege, you will be representing and certifying that you
have fully exercised your basic subscription privilege as described above. You
must exercise your oversubscription privilege at the same time you exercise
your basic subscription privilege.
Reason for the Rights Offering
To finance the merger of one of our subsidiaries with WWG, we were required
to raise substantial debt and equity financing in a short amount of time. As a
result, we entered into a new credit facility with a syndicate of lenders. Our
new credit facility provides for borrowings of up to $860 million, as opposed
to the $370 million provided for by our previous credit facility. In addition,
in order to obtain such debt financing, concurrently with the merger we sold
12.5 million and 30.625 million newly-issued but unregistered shares of our
common stock to Clayton, Dubilier & Rice Fund V Limited Partnership and
Clayton, Dubilier & Rice Fund VI Limited Partnership, respectively, for $4.00
per share. Our sale of unregistered common stock to the Clayton, Dubilier &
Rice funds allowed us to raise the shareholder equity we needed within the time
frame required to consummate the WWG merger and to obtain our new credit
facility. However, as a result of our sale of common stock to the Clayton,
Dubilier & Rice funds, the percentage equity ownership interest in Dynatech of
our other shareholders was diminished. Now that the Merger is complete, we are
conducting this offering so that such shareholders may, at their option,
reverse the diminution of their percentage equity ownership interest of
Dynatech by purchasing newly-issued shares of our common stock at the same
price per share that was paid by the Clayton, Dubilier & Rice funds.
Accordingly, Clayton, Dubilier & Rice Fund V Limited Partnership has agreed to
refrain from exercising any rights to purchase common stock received by it in
this offering, and Clayton, Dubilier & Rice Fund VI Limited Partnership, which
was not one of our shareholders prior to the WWG merger, will not receive
rights to purchase common stock in this rights offering.
We will use the net proceeds of this offering for potential acquisitions and
other general corporate purposes. See "Use of Proceeds."
No Board Investment Recommendation to Shareholders
Our Board of Directors does not make any recommendation to you about whether
you should exercise any rights. In making the decision to exercise or not
exercise your rights, you must consider your own best interests.
If you choose not to exercise your subscription rights in full, your
relative ownership interest of Dynatech will be diluted. If you exercise
rights, you risk investment loss on new money invested. The trading price of
our common stock may decline below the subscription price. We cannot assure you
that the subscription price will remain below any trading price for our common
stock or that its trading price will not decline to below the subscription
price during or after the rights offering. For a summary of some of the risks a
new investment would entail, see "Risk Factors" beginning on page 16.
Expiration Time and Date
The rights expire on , 2000, at 5:00 p.m., New York City time. We have
the option of extending the expiration date for any reason, although presently
we do not intend to do so. Rights not exercised by the expiration date will be
null and void.
In order to exercise rights in a timely manner, you must assure that
Equiserve Trust Company, N.A. actually receives, prior to expiration of the
rights, the properly executed and completed subscription warrant (or "Form of
Notice of Guaranteed Delivery"), together with full payment for all shares you
wish to purchase.
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No Revocation
You are not allowed to revoke or change your exercise of rights after you
send in your subscription forms and payment.
Transferability of Rights
The rights are not transferable and may be exercised only by the persons to
whom they are issued.
Extension, Withdrawal and Amendment
We have the option of extending the period for exercising your rights,
although we presently do not intend to do so.
We also reserve the right to withdraw or terminate this rights offering at
any time for any reason. In the event that the offering is withdrawn or
terminated, all funds received from subscriptions by rights holders will be
returned. Interest will not be payable on any returned funds.
We reserve the right to amend the terms of this rights offering. If we make
an amendment that we consider significant, we will (1) mail notice of the
amendment to all shareholders of record as of the record date, (2) extend the
expiration date by at least ten days and (3) offer all subscribers no less than
ten days to revoke any subscription already submitted. The extension of the
expiration date will not, in and of itself, be treated as a significant
amendment for these purposes.
Commitment of Clayton, Dubilier & Rice Fund VI Limited Partnership to Act as
Standby Purchaser
Clayton, Dubilier & Rice Fund VI Limited Partnership, which purchased [ ]%
of our outstanding common stock in connection with the WWG merger, has agreed
to purchase all newly-issued shares of our common stock that are offered in
this rights offering but not purchased by our other shareholders. If no other
shareholders exercise their rights under this offering, Clayton, Dubilier &
Rice Fund VI Limited Partnership's percentage equity ownership of Dynatech will
increase to approximately [ ] %.
Mailing of Warrants and Record Holders
We are sending a subscription warrant to each record holder along with this
prospectus and related instructions to evidence the rights. In order to
exercise rights, you must fill out and sign the subscription warrant and timely
deliver it with full payment for the shares to be purchased. Only the holders
of record of our common stock as of the close of business as of the record date
may exercise rights. You are a record holder for this purpose only if your name
is registered as a shareholder with our transfer agent, Equiserve Trust
Company, N.A., as of the record date.
A depository bank, trust company or securities broker or dealer which is a
record holder for more than one beneficial owner of shares may divide or
consolidate subscription warrants to represent shares held as of the record
date by their beneficial owners, upon proper showing to Equiserve Trust
Company, N.A.
If you own shares held in a brokerage, bank or other custodial or nominee
account, in order to exercise your rights you must promptly send the proper
instruction form to the person holding your shares. Your broker, dealer,
depository or custodian bank or other person holding your shares is the record
holder of your shares and will have to act on your behalf in order for you to
exercise your rights. We have asked your broker, dealer or other nominee
holders of our stock to contact the beneficial owners to obtain instructions
concerning rights the beneficial owners it represents are entitled to exercise.
Foreign and Unknown Addresses
We are not mailing subscription warrants to shareholders whose addresses are
outside the United States or who have an APO or FPO address. In those cases,
the subscription warrants will be held by Equiserve Trust Company, N.A. for
those shareholders. To exercise their rights, these shareholders must notify
Equiserve Trust Company, N.A. prior to 11:00 a.m., New York City time, on the
third business day prior to the expiration date.
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Right to Block Exercise Due to Regulatory Issues
We reserve the right to refuse the exercise of rights by any holder of
rights who would, in our opinion, be required to obtain prior clearance or
approval from any state, federal or foreign regulatory authorities for the
exercise of rights or ownership of additional shares if, at the expiration
date, this clearance or approval has not been obtained. We are not undertaking
to pay any expenses incurred in seeking such clearance or approval.
We are not offering or selling, or soliciting any purchase of, shares in any
state or other jurisdiction in which this rights offering is not permitted. We
reserve the right to delay the commencement of the rights offering in certain
states or other jurisdictions if necessary to comply with local laws. However,
we may elect not to offer rights to residents of any state or other
jurisdiction whose law would require a change in the rights offering in order
to carry out the rights offering in such state or jurisdiction.
Procedures to Exercise Rights
Please do not send subscription warrants or related forms to us. Please send
the properly completed and executed form of subscription warrant with full
payment to the subscription agent for this rights offering, Equiserve Trust
Company, N.A.
You should read carefully the subscription warrant and related instructions
and forms which accompany this prospectus. You should call Mackenzie Partners,
Inc., the information agent for this rights offering, at the address and
telephone number listed below under the caption "The Rights Offering--Questions
and Assistance Concerning the Rights" promptly with any questions you may have.
You may exercise your rights by delivering to Equiserve Trust Company, N.A.,
at the address specified below and in the instructions accompanying this
prospectus, on or prior to the expiration date:
. Properly completed and executed subscription warrant(s) which evidence
your rights. See "The Rights Offering--Delivery of Subscription Warrant"
below for instructions on where to send these.
. Payment in full of the subscription price for each newly issued share of
our common stock you wish to purchase under the basic subscription
privilege and the oversubscription privilege. See "The Rights Offering--
Required Forms of Payment of Subscription Price" below for payment
instructions.
Required Forms of Payment of Subscription Price
The subscription price is $4.00 per share subscribed for, payable in cash.
All payments must be cleared on or before the expiration date.
If you exercise any rights, you must deliver to Equiserve Trust Company,
N.A. full payment in the form of:
. a personal check, certified or cashier's check or bank draft drawn upon a
U.S. bank, or a U.S. postal money order, payable to Equiserve Trust
Company, N.A., subscription agent, or
. a wire transfer of immediately available funds to the account maintained
by the Equiserve Trust Company, N.A. for this rights offering. If you
desire to make payment by wire transfer, you must contact Equiserve Trust
Company, N.A., at 1 (781) 575-3120 to receive a Wire Authorization Form.
In order for you to timely exercise your rights, Equiserve Trust Company,
N.A. must actually receive the subscription price before the expiration date.
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Funds paid by uncertified personal check may take at least five business
days to clear. Accordingly, if you pay the subscription price by means of
uncertified personal check, you should make payment sufficiently in advance of
the expiration date to ensure that your check actually clears and the payment
is received before such date. We are not responsible for any delay in payment
by you and suggest that you consider payment by means of certified or cashier's
check, money order or wire transfer of funds.
Delivery of Subscription Warrant
All subscription warrants, payments of the subscription price, nominee
holder certifications, notices of guaranteed delivery and DTC participant
oversubscription exercise forms, to the extent applicable to your exercise of
rights, must be delivered to Equiserve Trust Company, N.A. as follows:
By Hand: By First Class Mail: By Overnight
Securities Transfer & Equiserve Courier:
Reporting Services, Inc. Attn: Corporate Actions Equiserve
C/O Equiserve PO Box 9573 Attn: Corporate
100 William Street, Galleria Boston, MA 02205-9573 Actions
New York, NY 10038 40 Campanelli Drive
Braintree, MA 02184
Eligible institutions may deliver "Notice of Guaranteed Delivery" forms by
facsimile transmission. Equiserve Trust Company, N.A.'s facsimile number is 1
(781) 575-4826. You should confirm receipt of all facsimiles by calling 1
(781) 575-4816.
Special Procedure under "Notice of Guaranteed Delivery" Form
If you wish to exercise rights but cannot ensure that Equiserve Trust
Company, N.A. will actually receive the executed subscription warrant before
the expiration date, you may alternatively exercise rights by causing all of
the following to occur within the time prescribed:
. Full payment must be received by Equiserve Trust Company, N.A. prior to
the expiration date for all of the newly-issued shares of our common
stock you desire to purchase pursuant to the basic subscription privilege
and the oversubscription privilege.
. A properly executed "Notice of Guaranteed Delivery" substantially in the
form distributed by us with your subscription warrant and accompanied by
a Medallion Guaranty must be received by Equiserve Trust Company, N.A. at
or prior to the expiration date.
. The "Notice of Guaranteed Delivery" form must be executed by both you and
one of the following: (1) a member firm of a registered national
securities exchange, (2) a member of the National Association of
Securities Dealers, Inc. (NASD), (3) a commercial bank or trust company
having an office or correspondent in the United States, or (4) other
eligible guarantor institution qualified under a guarantee program
acceptable to Equiserve Trust Company, N.A. The co-signing institution
must provide a Medallion Guaranty on the Notice of Guaranteed Delivery
guaranteeing that the subscription warrant will be delivered to Equiserve
Trust Company, N.A. within three business days after the date of the
form. Your Notice of Guaranteed Delivery form must also provide other
relevant details concerning the intended exercise of your rights.
. The properly completed subscription warrant(s) with any required
signature guarantee must be received by Equiserve Trust Company, N.A.
within three business days following the date of the related Notice of
Guaranteed Delivery.
. If you are a nominee holder of rights, the "Nominee Holder Certification"
must also accompany the Notice of Guaranteed Delivery.
A Notice of Guaranteed Delivery may be delivered to Equiserve Trust Company,
N.A. in the same manner as subscription warrants at the addresses set forth
above under the caption "The Rights Offering--Delivery of Subscription Warrant"
or by telegram or facsimile transmission.
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Equiserve Trust Company, N.A.'s facsimile number is 1 (781) 575-4826. You
should confirm facsimile deliveries by calling 1 (781) 575-4816.
Additional copies of the form of Notice of Guaranteed Delivery are available
upon request from Mackenzie Partners, Inc., whose address and telephone number
are set forth below under the caption "Questions and Assistance Concerning the
Rights."
Incomplete Forms; Insufficient Payment
If you do not indicate on your subscription warrant the number of rights
being exercised, or do not forward sufficient payment for the number of rights
that you indicate are being exercised, then we will accept the subscription
forms and payment only for the maximum number of rights that may be exercised
based on the actual payment delivered. We will make this determination as
follows: (1) you will be deemed to have exercised your basic subscription
privilege to the full extent of the payment received, and (2) if any funds
remain, you will be deemed to have exercised your oversubscription privilege to
the extent of the remaining funds. We will return any payment not applied to
the purchase of shares under this rights offering as soon as practicable by
mail. Interest will not be payable on amounts refunded.
Prohibition on Fractional Shares
Each whole right entitles you to purchase one share of common stock at the
subscription price per share. We will accept any inadvertent subscription
indicating a purchase of fractional shares by rounding down to the nearest
whole share and, as soon as practicable, refunding without interest any payment
received for a fractional share.
Instructions to Nominee Holders
If you are a broker, trustee or depository for securities or other nominee
holder for beneficial owners of our common stock, we are requesting that you
contact such beneficial owners as soon as possible to obtain instructions and
related certifications concerning their rights. Our request to you is further
explained in the suggested form of letter of instructions from nominee holders
to beneficial owners accompanying this prospectus.
To the extent so instructed, nominee holders should complete appropriate
subscription warrants on behalf of beneficial owners and, in the case of any
exercise of the oversubscription privilege, the related form of "Nominee Holder
Certification," and submit them on a timely basis to Equiserve Trust Company,
N.A. with the proper payment.
Risk of Loss on Delivery of Subscription Warrant Forms and Payments
Each holder of rights bears all risk of the method of delivery to Equiserve
Trust Company, N.A. of subscription warrants and payments of the subscription
price.
If subscription warrants and payments are sent by mail, you are urged to
send these by registered mail, properly insured, with return receipt requested,
and to allow a sufficient number of days to ensure delivery to Equiserve Trust
Company, N.A. and clearance of payment prior to the expiration date.
Because uncertified personal checks may take at least five business days to
clear, you are strongly urged to pay, or arrange for payment, by means of
certified or cashier's check, money order or wire transfer of funds.
Procedures for DTC Participants
We expect that your exercise of your basic subscription privilege (but not
your oversubscription privilege) may be made through the facilities of The
Depository Trust Company (commonly known as DTC). If your
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rights are exercised as part of the basic subscription privilege through DTC,
we refer to them as "DTC Exercised Rights." If you hold DTC Exercised Rights,
you may exercise your oversubscription privilege by properly executing and
delivering to Equiserve Trust Company, N.A., at or prior to the time the rights
expire, a DTC participant oversubscription exercise form and a nominee holder
certification and making payment of the appropriate subscription price for the
number of shares of common stock for which your oversubscription privilege is
to be exercised. Please call Mackenzie Partners, Inc. at 1 (800) 322-2885 (toll
free) to obtain copies of the DTC oversubscription exercise form and the
nominee holder certification.
How Procedural and Other Questions Are Resolved
We are entitled to resolve all questions concerning the timeliness,
validity, form and eligibility of any exercise of rights. Our determination of
such questions will be final and binding. We, in our sole discretion, may waive
any defect or irregularity, or permit a defect or irregularity to be corrected
within such time as we may determine, or reject the purported exercise of any
right because of any defect or irregularity.
Subscription warrants will not be considered received or accepted until all
irregularities have been waived or cured within such time as we determine in
our sole discretion. Neither we nor Equiserve Trust Company, N.A. have any duty
to give notification of any defect or irregularity in connection with the
submission of subscription warrants or any other required document. Neither we
nor Equiserve Trust Company, N.A. will incur any liability for failure to give
such notification.
We reserve the right to reject any exercise of rights if the exercise does
not comply with the terms of this rights offering or is not in proper form or
if the exercise of rights would be unlawful or materially burdensome.
Issuance of Stock Certificates
Stock certificates for shares purchased in the rights offering will be
issued as soon as practicable after the expiration date. Equiserve Trust
Company, N.A. will deliver subscription payments to us only after consummation
of the rights offering and the issuance of stock certificates to our
shareholders that exercised rights. Unless you instruct otherwise in your
subscription warrant form, shares purchased by the exercise of rights will be
registered in the name of the person exercising the rights.
Questions and Assistance Concerning the Rights
You should direct any questions, requests for assistance concerning the
rights or requests for additional copies of this prospectus, forms of
instructions or the Notice of Guaranteed Delivery to:
Mackenzie Partners, Inc.
156 Fifth Avenue
New York, NY 10010
Telephone: 1 (800) 322-2885 (toll free)
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USE OF PROCEEDS
We estimate that the net proceeds of this offering will be approximately $20
million. We will use these proceeds for potential acquisitions and other
general corporate purposes.
DETERMINATION OF SUBSCRIPTION PRICE
As a result of our sale of newly-issued but unregistered shares of common
stock to Clayton, Dubilier & Rice Fund V Limited Partnership and Clayton,
Dubilier & Rice Fund VI Limited Partnership in connection with the WWG merger,
the percentage equity ownership interest of Dynatech of our shareholders other
than the Clayton, Dubilier & Rice funds was diminished. Now that the WWG merger
is complete, we are conducting this offering so that such shareholders may, at
their option, reverse the diminution of their percentage equity ownership
interest of Dynatech by purchasing newly-issued shares of our common stock for
the same $4.00 price per share as was paid by the Clayton, Dubilier & Rice
funds. The subscription price is not necessarily related to the assets, book
value or net worth of Dynatech or any other established criteria of value and
may not be indicative of the fair value of the securities offered.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
Our common stock is traded in the over-the-counter market under the symbol
"DYNA" On , 2000, there were registered holders of the common stock and
the price of our common stock on the over-the-counter market was $ . The
following table sets forth the high and low sales prices of our common stock on
the over-the-counter market for each quarterly period within our three most
recent fiscal years.
Since April 1, 1995, we have not declared or paid cash dividends to the
holders of our common stock. We intend to retain earnings for use in the
operation and expansion of our business. In addition, certain restrictions in
our credit agreements limit our ability to pay cash dividends.
<TABLE>
<CAPTION>
High Low
------- ------
<S> <C> <C>
Fiscal Year Ended March 31, 1999
First Quarter (1).......................................... $ 4.312 $3.125
Second Quarter............................................. $ 3.438 $2.687
Third Quarter.............................................. $ 3.000 $2.375
Fourth Quarter............................................. $ 3.500 $2.718
<CAPTION>
High Low
------- ------
<S> <C> <C>
Fiscal Year Ended March 31, 2000
First Quarter.............................................. $ 4.062 $3.125
Second Quarter............................................. $ 5.031 $3.437
Third Quarter.............................................. $ 8.000 $4.875
Fourth Quarter............................................. $15.937 $6.875
</TABLE>
- --------
(1) From April 1, 1998 to May 21, 1998, our common stock was traded on the New
York Stock Exchange ("NYSE"). After our merger on May 21, 1998 with an
entity formed by Clayton, Dubilier & Rice Fund V Limited Partnership,
however, our common stock ceased to be listed on the NYSE and became
available in the over-the-counter market. The high and low sales prices of
our common stock set forth herein are for the periods following May 21,
1998.
31
<PAGE>
CAPITALIZATION
The following table shows our cash and cash equivalents and actual
capitalization at December 31, 1999. The column captioned "Pro Forma As
Adjusted" gives effect to the pro forma adjustments described in the Unaudited
Pro Forma Condensed Consolidated Financial Statements herein and the receipt
and application of the net proceeds of this rights offering, assuming the
rights offering is fully subscribed. You should read the information set forth
below together with the Summary Financial Data and Unaudited Pro Forma
Condensed Consolidated Financial Statements herein, as well as our historical
consolidated financial statements and the notes thereto.
<TABLE>
<CAPTION>
As of December 31, 1999
--------------------------
Pro Forma
Actual As Adjusted
--------- -----------
(in thousands)
<S> <C> <C> <C>
Cash and cash equivalents.......................... $ 39,016 $ 101,905
========= ==========
Long-term debt, including current portion:
Bank Borrowings:
Revolving credit facility...................... 56,000 --
Term Loans..................................... 235,517 685,000
Notes............................................ 275,000 275,000
Other debt....................................... -- 33,581
--------- ----------
Total debt..................................... 566,517 993,581
Shareholders' equity (deficit)..................... (300,331) 6,757
--------- ----------
Total capitalization........................... $ 266,186 $1,000,338
========= ==========
</TABLE>
32
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Consolidated Financial
Statements are derived from our historical Consolidated Financial Statements,
which are incorporated by reference in this prospectus, and should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" also incorporated by reference in this prospectus.
The Unaudited Pro Forma Condensed Consolidated Financial Statements give
effect to the following:
. Our merger with WWG (after giving effect to the divestitures, which took
place in January and February 2000, of certain of WWG's operating
divisions);
. Our sale, in connection with the WWG merger, of 43,125,000 newly-issued
but unregistered shares of our common stock to Clayton, Dubilier & Rice
Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited
Partnership and the concurrent establishment of our new credit facility;
. This rights offering; and
. Our acquisitions of Pacific Systems Corporation, Sierra Design Labs,
Applied Digital Access, Inc. and certain assets of WPI, Inc., and our
divestitures of ComCoTec, Inc., Parallax, Inc. and Data Views
Corporation.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December
31, 1999 set forth herein was prepared assuming that the above-listed
transactions took place on that date. The Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the nine months ended December 31,
1999 and Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the fiscal year ended March 31, 1999 set forth herein were prepared assuming
that the above-listed transactions occurred as of the first day of each of the
periods presented.
The pro forma adjustments, as described in the Notes to Unaudited Pro Forma
Statements herein, are based on currently available information and certain
adjustments that management believes are reasonable. This pro forma financial
information is presented for informational purposes only and does not
necessarily represent what our financial position or results of operations
would have been if these transactions had in fact occurred on the dates
indicated and is not necessarily indicative of our financial position or
results of operations for any future period.
33
<PAGE>
DYNATECH CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1999
(in thousands)
<TABLE>
<CAPTION>
Other WWG Purchase Debt Related Equity Related
Dynatech Acquisitions/ Accounting Pro Forma Pro Forma
Corporation Divestitures (a) WWG (b) Adjustments (c) Adjustments (e) Adjustments (g) Total
----------- ----------------- -------- --------------- --------------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current asset:
Cash and cash
equivalents.......... $ 39,016 $(32,241) $ 43,530 $(258,400) $170,000 $140,000 $ 101,905
Accounts receivable,
net.................. 88,813 5,158 97,831 -- -- -- 191,802
Inventories........... 51,244 8,607 61,308 -- -- -- 121,159
Other current
assets............... 27,670 1,118 15,104 -- -- -- 43,892
--------- -------- -------- --------- -------- -------- ----------
Total current
assets............. 206,743 (17,358) 217,773 (258,400) 170,000 140,000 458,758
Property and equipment,
net................... 32,781 2,822 56,075 -- -- -- 91,678
Intangible assets,
net................... 92,769 25,574 157,405 376,400 -- -- 652,148
Other assets........... 74,704 (20) 6,146 -- 3,812 -- 84,642
--------- -------- -------- --------- -------- -------- ----------
Total assets........ $ 406,997 $ 11,018 $437,399 $ 118,000 $173,812 $140,000 $1,287,226
========= ======== ======== ========= ======== ======== ==========
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and
current portion of
long-term debt....... $ 6,398 $ -- $ 32,752 $ -- $ -- $ -- $ 39,150
Other current
liabilities.......... 133,587 7,742 92,221 30,000 20,000 (50,000) 233,550
--------- -------- -------- --------- -------- -------- ----------
Total current
liabilities........ 139,985 7,742 124,973 30,000 20,000 (50,000) 272,700
Long-term debt......... 560,198 -- 224,233 -- 170,000 -- 954,431
Pension Liabilities.... -- -- 34,552 -- -- -- 34,552
Deferred compensation.. 7,145 -- -- -- -- -- 7,145
Other Long Term
Liabilities........... -- -- 11,641 -- -- 11,641
Common Stock........... -- -- -- 130,000 -- -- 130,000
Stockholders' equity
(deficit)............. (300,331) 3,276 42,000 (42,000) (16,188) 190,000 (123,243)
--------- -------- -------- --------- -------- -------- ----------
Total liabilities
and stockholders'
equity (deficit)... $ 406,997 $ 11,018 $437,399 $ 118,000 $173,812 $140,000 $1,287,226
========= ======== ======== ========= ======== ======== ==========
</TABLE>
See accompanying notes to the unaudited pro forma statements.
34
<PAGE>
DYNATECH CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Nine Months Ended December 31, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Other WWG Purchase Other
Dynatech Acquisitions/ Accounting Pro Forma
Corporation Divestitures (a) WWG (b) Adjustments (d) Adjustments Total
----------- ---------------- -------- --------------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Sales................... $477,125 $46,768 $366,372 $ -- $ -- $890,265
Cost of sales........... 205,900 26,715 142,001 -- -- 374,616
-------- ------- -------- -------- -------- --------
Gross profit............ 271,225 20,053 224,371 -- -- 515,649
-------- ------- -------- -------- -------- --------
Selling, general and
administrative
expense................ 131,604 16,714 132,505 -- -- 280,823
Product development
expense................ 51,628 7,218 50,639 -- -- 109,485
Recapitalization-related
costs.................. 13,259 670 -- -- (13,929)(h) --
Restructuring and other
non-recurring charges.. -- -- 2,748 -- (2,748)(h) --
Acquired In-Process
R&D.................... -- -- -- -- -- --
Amortization of
intangibles............ 7,053 839 14,716 40,270 -- 62,878
Amortization of unearned
compensation........... 1,451 (55) -- -- -- 1,396
-------- ------- -------- -------- -------- --------
Total operating
expenses............... 204,995 25,386 200,608 40,270 (16,677) 454,582
-------- ------- -------- -------- -------- --------
Operating income....... 66,230 (5,333) 23,763 (40,270) 16,677 61,067
Interest expense........ (38,433) (4) (15,891) -- (16,263)(e) (70,591)
Interest income......... 1,874 346 462 -- -- 2,682
Other income, net....... 11 2 (2,250) -- -- (2,237)
-------- ------- -------- -------- -------- --------
Income from continuing
operations before
income taxes........... 29,682 (4,989) 6,084 (40,270) 414 (9,079)
Provision (benefit) for
income taxes........... 12,812 (738) 6,978 -- (2,706)(f) 16,346
Minority interest in
income (loss).......... -- -- -- -- -- --
-------- ------- -------- -------- -------- --------
Net Income.............. $ 16,870 $(4,251) $ (894) $(40,270) $ 3,120 $(25,425)
======== ======= ======== ======== ======== ========
Income per share:
Basic.................. $ 0.14 $ 0.14
======== ========
Diluted................ $ 0.13 $ 0.14
======== ========
Weighted average number
of shares:
Basic.................. 121,310 185,545
Diluted................ 131,366 185,545
</TABLE>
See accompanying notes to the unaudited pro forma statements.
35
<PAGE>
DYNATECH CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended March 31, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
WWG
Other Purchase Other
Dynatech Acquisitions/ Accounting Pro Forma
Corporation Divestitures (a) WWG (b) Adjustments (d) Adjustments Total
----------- ---------------- --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sales................... $522,854 $ 71,234 $ 443,455 $-- $-- $1,037,543
Cost of sales........... 228,572 35,130 182,559 -- -- 446,261
-------- --------- --------- --------- ------- ----------
Gross profit............ 294,282 36,104 260,896 -- -- 591,282
-------- --------- --------- --------- ------- ----------
Selling, general and
administrative
expense................ 149,006 21,212 174,249 -- -- 344,467
Product development
expense................ 54,023 15,423 68,440 -- -- 137,886
Recapitalization-related
costs.................. 43,386 -- -- -- (43,386) (h) --
Restructuring and other
non-recurring charges.. -- 2,118 8,896 -- (11,014) (h) --
Acquired In-Process
R&D.................... -- -- 27,732 -- (27,732) (h) --
Amortization of
intangibles............ 6,228 1,673 10,405 55,395 -- 73,701
Amortization of unearned
compensation........... 1,519 -- -- -- -- 1,519
-------- --------- --------- --------- ------- ----------
Total operating
expenses............... 254,162 40,426 289,722 55,395 (82,132) 557,573
-------- --------- --------- --------- ------- ----------
Operating income....... 40,120 (4,322) (28,826) (55,395) 82,132 33,709
Interest expense........ (46,198) -- (19,856) -- (23,765) (e) (89,819)
Interest income......... 3,398 620 847 -- -- 4,865
Other income, net....... 15,959 (15,912) (4,735) -- -- (4,688)
-------- --------- --------- --------- ------- ----------
Income from continuing
operations before
income taxes........... 13,279 (19,614) (52,570) (55,395) 58,367 (55,933)
Provision (benefit) for
income taxes........... 6,834 (2,970) (12,634) -- 14,722 (f) 5,952
Minority interest in
income (loss).......... -- -- 2,314 -- -- 2,314
-------- --------- --------- --------- ------- ----------
Net Income.............. $ 6,445 $ (16,644) $ (37,622) $ (55,395) $43,645 $ (59,571)
======== ========= ========= ========= ======= ==========
Income per share:
Basic.................. $ 0.06 $ (0.32)
======== ==========
Diluted................ $ 0.06 $ (0.32)
======== ==========
Weighted average number
of shares:
Basic.................. 106,212 184,152
Diluted................ 111,464 184,152
</TABLE>
See accompanying notes to the unaudited pro forma statements.
36
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS
a. Dynatech Acquisitions and Divestitures
Acquisitions
Pacific Systems Corporation
On June 19, 1998, Dynatech, through one of its indirectly wholly owned
subsidiaries, acquired all of the outstanding capital stock of Pacific Systems
Corporation of Kirkland, Washington ("Pacific") for a total purchase price of
approximately $20 million, including an incentive earnout. The acquisition was
accounted for using the purchase method of accounting and resulted in $18.0
million of goodwill which is being amortized over 30 years. The operating
results of Pacific have been included in Dynatech's consolidated financial
statements since June 19, 1998.
Sierra Design Labs
On September 10, 1999, Dynatech, through one of its wholly owned
subsidiaries, purchased the outstanding stock of Sierra Design Labs ("Sierra"),
a Nevada Corporation for a total purchase price of $6.3 million. The
acquisition was accounted for using the purchase method of accounting and
resulted in $4.9 million of goodwill which is being amortized over 10 years.
The operating results of Sierra have been included in Dynatech's consolidated
financial statements since September 10, 1999.
Applied Digital Access, Inc.
On November 1, 1999 and subsequently on November 8, 1999, Dynatech, through
one of its wholly owned subsidiaries, acquired all the outstanding stock of
Applied Digital Access, Inc. ("ADA") for a total purchase price of
approximately $81 million. The acquisition was accounted for using the purchase
method of accounting and resulted in $36 million of goodwill which is being
amortized over 3 years. The operating results of ADA have been included in
Dynatech's consolidated financial statements since November 1, 1999.
WPI Husky Computer, Inc., WPI Husky Computers Limited, WPI Oyster Termiflex
Limited
On February 24, 2000, Dynatech, through one of its wholly owned
subsidiaries, purchased certain assets and liabilities of WPI Husky Computer,
Inc., WPI Husky Computers Limited and WPI Oyster Termiflex Limited
(collectively "Husky"), all which were subsidiaries of WPI, Inc. The total
purchase price for Husky totalled approximately $34.8 million. The acquisition
was accounted for using the purchase method of accounting and resulted in
approximately $25.6 million of goodwill which is being amortized over 5 years.
Divestitures
ComCoTec, Inc.
On June 30, 1998, Dynatech sold the assets of ComCoTec, Inc. ("ComCoTec")
located in Lombard, Illinois to The Potomac Group, Inc. for $21 million.
Dynatech recorded a pre-tax gain on $15.9 million on the sale of the assets,
which was included in other income.
Parallax, Inc.
During fiscal year 1999, Dynatech liquidated the assets and liabilities of
Parallax, Inc. ("Parallax"). Any gain or loss from the liquidation activities
was immaterial.
DataViews Corporation
During the forth quarter of fiscal year 2000, Dynatech initiated activities
to dispose of DataViews Corporation ("DataViews"), located in Northampton,
Massachusetts. During March 2000, the Company had received a signed a letter of
intent to sell the stock of DataViews for a sale price of approximately $4
million. The gain on sale of the business is expected to be approximately $3.3
million.
37
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS--CONTINUED
b. WWG Pro Forma Sub-consolidation
On , 2000, Dynatech consummated the merger of one of its subsidiaries
with and Wavetek Wandel and Goltermann, Inc. ("WWG") pursuant to which WWG
became a Dynatech subsidiary.
Set forth below are the unaudited pro forma results of operations for WWG
for the nine month period ended December 31, 1999 and for the twelve months
ended March 31, 1999. The WWG results have been adjusted to exclude the results
of operations for three divisions that WWG divested during January 2000 and
February 2000.
<TABLE>
<CAPTION>
For the Nine Month Period Ended
December 31, 1999
--------------------------------
(In thousands)
Total
WWG Pro Forma
WWG Divestitures WWG
-------- ------------ ---------
<S> <C> <C> <C>
Sales........................................ $391,904 $(25,532) $366,372
Cost of sales................................ 155,164 (13,163) 142,001
-------- -------- --------
Gross profit................................. 236,740 (12,369) 224,371
Selling, general and administrative expense.. 142,103 (9,598) 132,505
Product development expense.................. 52,601 (1,962) 50,639
Restructuring and other non-recurring
charges..................................... 2,748 -- 2,748
Amortization of intangibles.................. 14,716 -- 14,716
-------- -------- --------
Total operating expenses..................... 212,168 (11,560) 200,608
-------- -------- --------
Operating income........................... 24,572 (809) 23,763
Interest expense............................. (15,891) -- (15,891)
Interest income.............................. 462 -- 462
Other income, net............................ (2,250) -- (2,250)
-------- -------- --------
Income from continuing operations before
income taxes................................ 6,893 (809) 6,084
Provision (Benefit) for income taxes......... 7,302 (324) 6,978
-------- -------- --------
Net Income................................... $ (409) $ (485) $ (894)
======== ======== ========
</TABLE>
38
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS--CONTINUED
<TABLE>
<CAPTION>
For the Twelve Month Period Ended
March 31, 1999
----------------------------------------
(In thousands)
Total
WWG Pro Forma
WWG Divestitures WWG
----------- ---------------------------
<S> <C> <C> <C>
Sales................................ $ 477,807 $ (34,352) $ 443,455
Cost of sales........................ 199,380 (16,821) 182,559
----------- ----------- -----------
Gross profit......................... 278,427 (17,531) 260,896
Selling, general and administrative
expense............................. 186,980 (12,731) 174,249
Product development expense.......... 70,728 (2,288) 68,440
Restructuring and other non-recurring
charges............................. 8,896 -- 8,896
Acquired In-Process R&D.............. 27,732 -- 27,732
Amortization of intangibles.......... 10,405 -- 10,405
----------- ----------- -----------
Total operating expenses............. 304,741 (15,019) 289,722
----------- ----------- -----------
Operating income................... (26,314) (2,512) (28,826)
Interest expense..................... (19,856) -- (19,856)
Interest income...................... 847 -- 847
Other income, net.................... (4,735) -- (4,735)
----------- ----------- -----------
Income from continuing operations
before income taxes................. (50,058) (2,512) (52,570)
Provision (benefit) for income
taxes............................... (11,629) (1,005) (12,634)
Minority interest in income (loss)... 2,314 -- 2,314
----------- ----------- -----------
Net Income........................... $ (36,115) $ (1,507) $ (37,622)
=========== =========== ===========
</TABLE>
39
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS--CONTINUED
Set forth below is the unaudited pro forma balance sheet of WWG as of
December 31, 1999, which assumes that the divestitures of the three divisions
took place as of December 31, 1999. The proceeds related to the divestitures
totalled approximately $30 million and the gain on the sale of the divisions
was approximately $20 million.
<TABLE>
<CAPTION>
WWG pro forma balance sheet at December 31, 1999
-------------------------------------------------------
(In thousands)
WWG
WWG Divested Divestiture
WWG Divisions Accounting Total
------------ -------------- ---------------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equiva-
lents................ $ 13,530 $ -- $ 30,000 $ 43,530
Accounts receivable,
net.................. 103,831 (6,000) -- 97,831
Inventories........... 66,308 (5,000) -- 61,308
Other current assets.. 15,104 -- -- 15,104
------------ ------------ ----------- ------------
Total current
assets............. 198,773 (11,000) 30,000 217,773
Property and equipment,
net.................... 58,075 (2,000) -- 56,075
Intangible assets, net.. 157,405 -- -- 157,405
Other assets............ 6,146 -- -- 6,146
------------ ------------ ----------- ------------
Total assets........ $ 420,399 $ (13,000) $ 30,000 $ 437,399
============ ============ =========== ============
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and cur-
rent portion of long-
term debt............ $ 32,752 $ -- $ -- $ 32,752
Other current liabili-
ties................. 95,221 (3,000) -- 92,221
------------ ------------ ----------- ------------
Total current
liabilities........ 127,973 (3,000) -- 124,973
Long-term debt.......... 224,233 -- -- 224,233
Pension liabilities..... 34,552 -- -- 34,552
Deferred compensation... -- -- -- --
Other long term
liabilities............ 11,641 -- -- 11,641
Common stock............ -- -- --
Stockholders' equity
(deficit).............. 22,000 (10,000) 30,000 42,000
------------ ------------ ----------- ------------
Total liabilities
and stockholders'
equity (deficit)... $ 420,399 $ (13,000) $ 30,000 $ 437,399
============ ============ =========== ============
</TABLE>
40
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS--CONTINUED
c. Purchase Accounting related to WWG Acquisition
<TABLE>
<S> <C>
Aggregate purchase price:
Cash in exchange for WWG stock..................................... $250,000
Cash in exchange for WWG options................................... 8,400
Dynatech Common Stock (approximately 14,987,000 shares)............ 130,000
--------
388,400
Less: Net assets to be acquired as of December 31, 1999 (SEE NOTE
B).................................................................. (42,000)
Add: Estimated costs of the acquisition.............................. 30,000
--------
Estimated excess of costs over net book value of net liabilities
acquired
allocated to goodwill............................................... $376,400
========
</TABLE>
The Company has not yet performed a formal exercise for allocating excess
purchase price over net book value, as the final purchase accounting cannot be
determined until the deal has been consummated.
The estimated useful life of the goodwill associated with the acquisition is
assumed to be 10 years.
d. Amortization of Intangibles
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
December 31, March 31,
1999 1999
------------ ----------
<S> <C> <C>
Amortization of the excess purchase price from WWG
proposed acquisition................................. $28,230 $37,640
Amortization of the excess purchase price from the
Husky acquisition.................................... 3,836 5,115
Amortization of other acquisitions' goodwill prior to
their respective acquisition dates................... 8,204 12,640
------- -------
Total Amortization.................................. $40,270 $55,395
======= =======
</TABLE>
41
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS--CONTINUED
e. Restructuring of debt
Upon consummation of the WWG merger, Dynatech refinanced the existing debt
of both Dynatech and WWG, as follows:
<TABLE>
<CAPTION>
Debt Debt Issuance Costs Interest Expense
------------ ------------------- -------------------------
For the For the
As of As of 9 Months Ended Year Ended
December 31, December 31, December 31, March 31,
1999 1999 1999 1999
------------ ------------------- -------------- ----------
<S> <C> <C> <C> <C>
Existing debt to be
paid:
Dynatech bank debt.... $(330,000) $ -- $ 15,267 $ 19,874
Dynatech debt issuance
costs for bank debt.. -- (10,800) 1,409 1,566
WWG senior
subordinated debt,
bank debt
and other debt....... (185,000) -- 15,892 19,903
WWG debt issuance
costs for bank
and other debt....... (5,388) 677 902
--------- -------- -------- --------
(515,000) (16,188) 33,245 42,245
--------- -------- -------- --------
New debt:
$860,000 Senior Credit
Facility:
6 year amortizing term
loan at an assumed
interest rate of
2.75% plus LIBOR
(8.85%).............. 175,000 -- (11,616) (15,488)
Debt issuance costs (6
year amortization)... -- 5,109 (639) (852)
7.5 year term loan at
an assumed interest
rate of 3.25% plus
LIBOR (9.35%)........ 510,000 -- (35,764) (47,685)
Debt issuance costs
(7.5 year
amortization)........ -- 14,891 (1,489) (1,985)
--------- -------- -------- --------
685,000 20,000 (49,508) (66,010)
--------- -------- -------- --------
Net addition to debt.... $ 170,000
=========
Net addition to debt
issuance costs......... $ 3,812
========
Net addition to interest
expense................ $(16,263) $(23,765)
======== ========
</TABLE>
At the consummation of the merger, Dynatech borrowed $685,000 of the
facility, leaving $175,000 available to be drawn under a 6 year revolving
credit facility, with an assumed interest rate of LIBOR plus 2.5% (8.7%).
f. Consolidated tax provision (benefit)
<TABLE>
<CAPTION>
For the For the
9 Months Ended Year Ended
December 31, March 31,
1999 1999
--- --- -------------- ----------
<S> <C> <C> <C> <C>
Pro forma consolidated tax provision
(benefit).................................. $(2,706) $14,722
======= =======
</TABLE>
42
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS--CONTINUED
g. Proceeds from sale of stock
<TABLE>
<S> <C>
Sale of 12,500 shares of Dynatech common stock
to CD&R Fund V at $4.00 per share............................... $ 50,000
Sale of 30,625 shares of Dynatech common stock
to CD&R Fund VI at $4.00 per share.............................. $122,500
Sale of 4,983 shares of Dynatech common stock
in Rights Offering to stockholders of record on April 20, 2000
(other than CD&R Fund V) at $4.00 per share (assumes the Rights
Offering is fully subscribed)(i)................................ $ 19,932
--------
Gross cash proceeds(ii).......................................... $192,432
Transaction fees and expenses(iii)............................... $ 50,000
Net cash proceeds................................................ $140,000
========
</TABLE>
- --------
(i) The record date for the Rights Offering is April 20, 2000. As the WWG
Merger was consummated after the record date, neither CD&R Fund VI nor the
WWG stockholders will be entitled to receive any Rights by virtue of the
shares of Dynatech common stock acquired in connection with the
consummation of the WWG merger.
(ii) For purposes of these unaudited pro forma statements, we rounded the gross
cash proceeds down to $190,000.
(iii) In connection with the WWG merger and the concurrent establishment of
Dynatech's new credit facility, the company incurred approximately $50
million of transaction related fees and expenses, including $6 million
payable to Clayton, Dubilier & Rice, Inc., an investment firm that
directs the management of Clayton, Dubilier & Rice Fund V Limited
Partnership and Clayton, Dubilier & Rice Fund VI Limited Partnership,
Dynatech's controlling shareholders.
h. Non-recurring charges
The statements of operations have been adjusted to exclude certain one-time
and non-recurring charges, including charges related to (i) Dynatech's
recapitalization, (ii) acquired research and development, (iii) restructuring,
and (iv) other non-recurring costs.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the offering to the holders of our common stock upon the
distribution of rights and to the holders of the rights upon their exercise.
This summary is based on provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed Treasury regulations promulgated
thereunder and administrative and judicial interpretations thereof, all as of
the date hereof and all of which are subject to change, possibly on a
retroactive basis.
This summary is limited to our shareholders who have held our common stock,
and will hold the rights and any shares acquired upon the exercise of rights,
as "capital assets" within the meaning of section 1221 of the Code. This
summary does not address all of the tax consequences that may be relevant to
particular holders in light of their personal circumstances, or to holders who
are subject to special rules (such as banks and other financial institutions,
broker-dealers, real estate investment trusts, regulated investment companies,
insurance companies, tax-exempt organizations and non-U.S. individuals or
entities). In addition, this summary does not include any description of the
tax laws of any state, local or non-U.S. government that may be applicable to a
particular holder.
Holders are urged to consult their own tax advisors with respect to the
particular U.S. federal income and estate tax consequences to them of this
offering, as well as the tax consequences under state, local, non-U.S. and
other tax laws and the possible effects of changes in tax laws.
Distribution of Rights. A holder of our common stock will not recognize
taxable income upon distribution of the rights.
Lapse of the Rights. A holder of the rights that allows the rights to lapse
will not recognize any gain or loss upon such lapse, and no adjustment will be
made to the basis of the common stock with respect to which the rights are
distributed.
Shareholder Tax Basis of the Rights. Except as provided in the following
sentence, the tax basis of the rights received by a holder of our common stock
will be zero. If, however, either: (i) the fair market value of the rights on
the date the rights are distributed is 15% or more of the fair market value (on
the date of distribution) of the shares of the common stock with respect to
which the rights are distributed or (ii) the holder properly elects, in the
holder's federal income tax return for the taxable year in which the holder
receives the rights, to allocate part of the tax basis of such common stock to
the rights, then, upon the exercise of the rights, the holder's tax basis in
such common stock will be allocated between such common stock and the rights in
proportion to the fair market values of each on the date of distribution.
Exercise of the Rights; Basis and Holding Period of the Common
Stock. Holders of the rights will not recognize any gain or loss upon the
exercise of the rights. The tax basis of the shares of our common stock
acquired through the exercise of the rights will be equal to the sum of the
subscription price for the rights and the holder's tax basis in the rights, if
any. The holding period for the shares acquired through the exercise of the
rights will begin on the date the rights are exercised.
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PLAN OF DISTRIBUTION
We are offering shares of our common stock directly to you pursuant to this
rights offering. We have not employed any brokers, dealers or underwriters in
connection with the solicitation or exercise of subscription privileges in this
rights offering and no commissions, fees or discounts will be paid in
connection with it. Certain of our officers and other employees may solicit
responses from you, but such officers and other employees will not receive any
commissions or compensation for such services other than their normal
employment compensation.
We will pay the fees and expenses of Equiserve Trust Company, N.A., as
subscription agent, and Mackenzie Partners, Inc., as information agent, and
also have agreed to indemnify the subscription agent and the information agent
from any liability they may incur in connection with this rights offering.
On or about , 2000, we will distribute the rights and copies of this
prospectus to the holder of record of our common stock on the record date. If
you wish to exercise your rights and subscribe for newly-issued shares of our
common stock, you should follow the procedures described under "The Rights
Offering--Procedures to Exercise Rights." The subscription rights are non-
transferable.
Shares of Dynatech common stock received through the exercise of
subscription rights will be traded on the over-the-counter market under the
symbol "DYNA" as our currently outstanding shares of common stock now trade.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be passed
upon for us by Debevoise & Plimpton, New York, New York. Debevoise & Plimpton
also acts and may hereafter act as counsel to Clayton, Dubilier & Rice, Inc.
and its affiliates and to Dynatech and its affiliates. Franci J. Blassberg,
Esq., a member of Debevoise & Plimpton, is married to Joseph L. Rice, III, who
is a director of Dynatech and a shareholder of the managing general partners of
the general partners of Clayton, Dubilier & Rice Fund V Limited Partnership and
Clayton, Dubilier & Rice Fund VI Limited Partnership, our controlling
shareholders.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Dynatech for the fiscal year
ended March 31, 1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in accounting and auditing.
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MATERIAL CHANGES
Merger with WWG
On , 2000, we merged with WWG, a leading designer and manufacturer
of a comprehensive range of communications test equipment and systems. We
acquired WWG to grow our communications test equipment and services business,
which, prior to the merger, was conducted solely by our TTC subsidiary.
Management believes that our combined TTC-WWG business is the world's second
largest (by sales) provider of communications test equipment and systems and
related services.
In connection with the WWG merger and the concurrent establishment of our
new credit facility (discussed below), we incurred approximately $50 million of
transaction related fees and expenses, including $6 million payable to Clayton,
Dubilier & Rice, Inc., an investment firm that directs the management of
Clayton, Dubilier & Rice Fund V Limited Partnership and Clayton, Dubilier &
Rice Fund VI Limited Partnership, our controlling shareholders.
Equity Financing in connection with the WWG Merger
To finance the WWG merger, we were required to raise substantial debt and
equity financing in a short amount of time. As a result, we entered into a new
credit facility with a syndicate of lenders. Our new credit facility provides
for borrowings of up to $860 million, as opposed to the $370 million provided
for by our previous credit facility. In addition, in order to obtain such debt
financing, concurrently with the merger we sold 12.5 million and 30.625 million
newly-issued but unregistered shares of our common stock to Clayton, Dubilier &
Rice Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited
Partnership, respectively, for $4.00 per share. Our sale of unregistered common
stock to the Clayton, Dubilier & Rice funds allowed us to raise the cash equity
we needed within the time frame required to consummate the WWG merger and to
obtain our new credit facility.
Debt Financing in connection with the WWG Merger
In connection with the WWG merger, Dynatech LLC, our wholly owned
subsidiary, and certain of our German subsidiaries established a new senior
secured credit facility with a syndicate of financial institutions. Morgan
Guaranty Trust Company of New York is the administrative agent of the new
facility, Credit Suisse First Boston is the syndication agent, and The Chase
Manhattan Bank and Bankers Trust Company are co-documentation agents. Our new
senior credit agreement, which established our new credit facility, provides
for senior secured credit facilities in an aggregate principal amount of up to
approximately $860 million, consisting of (1) a revolving credit facility
available to Dynatech LLC in U.S. dollars or euros, in an aggregate principal
amount of up to $175 million, (2) a Tranche A term loan of $75 million to
Dynatech LLC with a six year amortization, (3) a Tranche B term loan of $510
million to Dynatech LLC with a seven and one-half year amortization and (4)
German term loans from certain German banks in an aggregate amount equal to
(Euro)103 million to our German subsidiaries with six year amortizations. The
new credit facility also provides for the issuance of a letter of credit that
the German banks may draw upon in the event of the failure of our German
subsidiaries to make payments on the (Euro)103 million loans, and our German
subsidiaries are required to reimburse the letter of credit issuer for any such
issuances. The amount of the letter of credit also may be fully drawn under
certain circumstances, and in such event the amount of the draw shall convert
into term loans to our German subsidiaries with similar amortization to the
German term loans.
Amortization. The Tranche A term loan will be amortized in four quarterly
installments of $750,000 commencing on June 30, 2000, four quarterly
installments of $2.0 million commencing on June 30, 2001, four quarterly
installments of $3.75 million commencing on June 30, 2002, four quarterly
installments of $7.5 million commencing on June 30, 2003, four quarterly
installments of $2.5 million commencing on June 30, 2004 and four quarterly
installments of $2.25 million commencing on June 30, 2005. The Tranche B term
loan will be amortized in 24 quarterly installments of $2.0 million, commencing
on June 30, 2000, four quarterly
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installments of $77.5 million commencing on June 30, 2006, and two quarterly
installments of $76.0 million commencing on June 30, 2007. The German term
loans will be amortized in four quarterly installments of (Euro)500,000
commencing on June 30, 2000, twelve quarterly installments of (Euro)750,000
million commencing on June 30, 2001, four quarterly installments of (Euro)7.25
million commencing on June 30, 2004, three quarterly installments of (Euro)15.0
million commencing on June 30, 2005 and one quarterly installments of (Euro)2.5
million on March 31, 2006.
Use of Facility. We used the term loans to refinance certain existing
indebtedness and as part of the financing for the WWG merger. Our revolving
credit facility is available to us from time to time for potential acquisitions
and other general corporate purposes.
Guarantee; Security. The obligations of Dynatech LLC under our revolving
credit facility and the Tranche A and Tranche B term loans and the
reimbursement obligations of our German subsidiaries under the letter of credit
relating to the German term loan is guaranteed by each active direct or
indirect U.S. subsidiary of Dynatech LLC and by Dynatech Corporation. The
obligations under our new credit facility are secured by a pledge of our equity
interest in Dynatech LLC, by substantially all of the assets of Dynatech LLC
and each active direct or indirect U.S. subsidiary of Dynatech LLC, and by a
pledge of the capital stock of each such direct or indirect U.S. subsidiary,
and 65% of the capital stock of each subsidiary of Dynatech LLC that acts as a
holding company of Dynatech LLC's foreign subsidiaries.
Interest. The term loans and loans under our revolving credit facility bear
interest at floating rates based upon the interest rate option we elect.
Prepayments. Our new credit facility generally permits voluntary prepayment
of loans thereunder without premium or penalty, subject to certain limitations.
Mandatory prepayments are required to be made from (a) 100% of net proceeds
from certain asset sales, casualty insurance and condemnation awards or other
similar recoveries; (b) 100% of the net proceeds from the issuance of
indebtedness by us, other than as permitted by our new credit facility; and (c)
50% of annual excess cash flow for each fiscal year in which the ratio of our
debt on the last day of such fiscal year to our EBITDA for such fiscal year is
greater than or equal to 4.0 to 1.0.
Covenants and Events of Default. Our new credit facility contains covenants
that, among other things, restrict our ability to dispose of assets, incur
additional debt, guarantee obligations or contingent liabilities, repay our 9
3/4% Senior Subordinated Notes due 2008, pay dividends, create liens on assets,
make investments, loans or advances, engage in mergers or consolidations, make
capital expenditures or engage in certain transactions with affiliates. Our new
credit facility contains customary events of default.
As a result of the WWG merger and the concurrent establishment of our new
credit facility, our outstanding indebtedness is approximately $994 million,
consisting of $275 million of our 9 3/4% Senior Subordinated Notes due 2008,
$685 million of term loans outstanding under our new credit facility and
approximately $34 million of other debt.
Going forward, our principal sources of liquidity are expected to be cash
flow from our operations and borrowings under our revolving credit facility.
The amount under our revolving credit facility that remained available as of
, 2000 was $175 million. We anticipate that the principal uses of our
liquidity will be to provide working capital, meet debt service requirements
and to finance capital expenditures and our business and growth strategy. Our
revolving credit facility will also be available for the issuance of letters of
credit.
Strategic Acquisitions
WPI Husky Computer, Inc., WPI Husky Computers Limited, WPI Oyster Termiflex
Limited. On February 24, 2000, we acquired, through one of our subsidiaries,
certain assets and liabilities of subsidiaries of WPI, Inc. (the "WPI
Businesses"). The total purchase price for the WPI Businesses was approximately
$35 million. Based in the United Kingdom, the WPI Businesses manufacture rugged
mobile computer products similar to those sold by our Itronix subsidiary. The
products are used by field-service personnel in a variety of applications,
including meter reading, stock control, shipping and transport logistics and
systems/equipment
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maintenance. The WPI Businesses have extensive distribution networks in Europe,
Africa and Asia, and our management expects them to add to the geographic sales
reach of our Itronix subsidiary, which sells primarily in the United States.
ICS Advent UK. On January 4, 2000, we purchased the remaining outstanding
stock of ICS Advent (Europe) Ltd. ("ICSUK"). We previously owned 25% of ICSUK.
ICSUK is primarily a distributor of mission-critical computer systems to the
defense, factory-automation, data and telecommunications markets within Europe
as well as a distributor of rack-mounted computers supplied by our ICS Advent
subsidiary.
Applied Digital Access, Inc. On November 1, 1999, through one of our
subsidiaries, we acquired all of the outstanding capital stock of Applied
Digital Access, Inc. ("ADA") for approximately $81 million. ADA, which is
headquartered in San Diego, California, is a provider of network performance
management products that include systems, software and services used to manage
the quality, performance, availability and reliability of telecommunications
service providers' networks.
Sierra Design Labs. On September 10, 1999, through one of our subsidiaries
we purchased Sierra Design Labs ("Sierra") for approximately $6 million. Sierra
designs, manufactures and markets uncompressed, real-time videodisk recorders
and is included in our visual communications business.
Whistler Litigation
On June 27, 1996, Cincinnati Microwave, Inc. ("CMI") filed an action in the
United States District Court for the Southern District of Ohio against us and
Whistler Corporation of Massachusetts ("Whistler"), alleging willful
infringement of CMI's patent for a mute function in radar detectors. In 1994,
we sold our radar detector business to Whistler. We, along with Whistler, have
asserted in response that we have not infringed CMI's patent, and that, in any
event, the patent is invalid and unenforceable. We obtained an opinion of
counsel from Bromberg & Sunstein LLP in connection with the manufacture and
sale of our Whistler series radar detectors and will be offering the opinion,
among other things, as evidence that any alleged infringement was not willful.
On March 24, 1998, CMI, together with its co-plaintiff and patent assignee
Escort, Inc., moved for summary judgment. We, along with Whistler, opposed the
motion for summary judgment and filed our own motions for summary judgment.
Discovery in this matter closed on June 20, 1998. On May 27, 1999 Whistler
filed a Chapter 11 bankruptcy case in the United States Bankruptcy Court for
the District of Massachusetts. Pursuant to that filing, CMI sold its mute
feature patent (and other assets) to Escort Acquisition Corp. However, CMI
retained the right to pursue past damages from us.
On February 18, 2000, the United States Magistrate issued a Report and
Recommendation recommending that half of the claims asserted by CMI be resolved
in our favor, and that the remaining claims proceed to trial. The parties filed
various objections to the Report and Recommendation and the district court
judge has not yet ruled on those objections. A hearing on the parties'
dispositive motions was held in May 1999. The trial of CMI's claims is
currently scheduled to be held in August 2000, and we intend to defend the
lawsuit vigorously. We do not believe that the outcome of this litigation is
likely to have a material adverse effect on our financial condition, results of
operations or liquidity.
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You should rely only on the information contained in this prospectus and the
information to which we have referred you. We have not authorized anyone else
to provide you with information different from the information contained in
this prospectus. If anyone provides you with different or inconsistent
information, you should not rely on it. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front page of this prospectus. Also, you should not assume that there
has been no change in the affairs of Dynatech Corporation since the date of
this prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PROSPECTUS SUMMARY......................................................... 1
FORWARD-LOOKING STATEMENTS................................................. 15
RISK FACTORS............................................................... 16
THE RIGHTS OFFERING........................................................ 24
USE OF PROCEEDS............................................................ 31
DETERMINATION OF SUBSCRIPTION PRICE........................................ 31
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY............................ 31
CAPITALIZATION............................................................. 32
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS............ 33
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 44
PLAN OF DISTRIBUTION....................................................... 45
LEGAL MATTERS.............................................................. 45
EXPERTS.................................................................... 45
MATERIAL CHANGES........................................................... 46
</TABLE>
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Rights to Subscribe
to
4,983,048 Shares
----------------
[Logo DYNATECH]
Common Stock
----------------
PROSPECTUS
----------------
, 2000
Preliminary Prospectus, dated
April 24, 2000
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities offered hereby.
<TABLE>
<S> <C>
SEC Registration Fee................................................ $ 5,280
Subscription Agent Fee.............................................. [ ]
Printing and Engraving Costs........................................ [ ]
Legal Fees and Expenses............................................. [ ]
Accounting Fees and Expenses........................................ [ ]
Miscellaneous....................................................... [ ]
-------
Total............................................................. $
=======
</TABLE>
Item 15. Indemnification of Directors and Officers
Dynatech Corporation ("Dynatech") is incorporated under the laws of the
State of Delaware. Section 145 of the Delaware Corporation Law, as amended, and
Subsection (e) of Article Sixth of Dynatech's Certificate of Incorporation
provides for the indemnification, except in certain circumstances set forth
below, of officers, directors, employees and agents of Dynatech for certain
expenses incurred in connection with any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative or
investigative, and for the purchase and maintenance of insurance by Dynatech on
behalf of officers, directors, employees and agents of Dynatech and its
subsidiaries against any liability asserted against, and incurred by, any such
officer, director, employee or agent in such capacity. Set forth below is the
text of Section 145 and the text of Subsection (e) of Article Sixth of
Dynatech's Certificate of Incorporation.
Section 145 of the Delaware Corporation Law, as amended, provides as
follows:
"145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE.--(a) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if this person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
this person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
(b) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a
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manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) by the
shareholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of shareholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity
while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not
the corporation would have the power to indemnify such person against such
liability under this section.
(h) For purposes of this section, references to the "corporation' shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
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(i) For purposes of this section, references to "other enterprises'
shall include employee benefit plans; references to "fines' shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation' shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation' as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of shareholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorney's fees)."
Subsection (e) of Article Sixth of the Amended and Restated Certificate of
Incorporation of Dynatech provides as follows:
"(e) No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of his or her fiduciary
duty as a director, provided that nothing contained in this Certificate of
Incorporation shall eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware or (iv)
for any transaction from which the director derived an improper personal
benefit."
As permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended, Dynatech has purchased and maintains insurance providing
for reimbursement to elected directors and officers of Dynatech and its
subsidiaries, subject to certain exceptions, of amounts they may be legally
obligated to pay, including but not limited to damages, judgments, settlements,
costs and attorneys' fees (but not including fines, penalties or matters not
insurable under the law), as a result of claims and legal actions instituted
against them to recover for their acts while serving as directors or officers.
Item 16. List of Exhibits
<TABLE>
<C> <S>
3.1 Amended and Restated Certificate of Incorporation of Dynatech
Corporation. Incorporated by reference to the relevant exhibit to
Dynatech's Proxy Statement for the Annual Meeting of Stockholders (File
No. 001-12657) filed with the Securities and Exchange Commission on July
27, 1999 (the "Dynatech Proxy Statement").
3.2 Amended and Restated By-Laws of Dynatech Corporation Incorporated by
reference to the relevant exhibit to the Dynatech Proxy Statement.
4.1 Form of Subscription Warrant to Subscribe for Shares of Dynatech
Corporation Common Stock.*
5.1 Opinion of Debevoise & Plimpton.*
23.1 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of Debevoise & Plimpton. Included in Exhibit 5.1 hereto.*
24.1 Powers of Attorney.
99.1 Form of Subscription Agent Agreement between Dynatech Corporation and
Equiserve Trust Company, N.A.*
</TABLE>
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<TABLE>
<S> <C>
99.2 Form of Information Agent Agreement between Dynatech Corporation and Mackenzie Partners Inc.*
99.3 Form of Instructions as to Use of Subscription Warrant.*
99.4 Form of Notice of Guaranteed Delivery.*
99.5 Form of Letter to Stockholders of Record.*
99.6 Form of Letter from Brokers or Other Nominees to Beneficial Owners of Common Stock.*
99.7 Form of Instructions by Beneficial Owners to Brokers or Other Nominees.*
99.8 Form of Announcement of Filing Registration Statement.*
99.9 Form of Letter to Dealers and Other Nominees.*
</TABLE>
- --------
* To be filed by amendment.
Undertakings
The undersigned registrant hereby undertakes:
(a) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(b) to supplement the prospectus and, after the expiration of the
subscription period, to set forth the results of the subscription offer;
(c) insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue;
(d) for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective; and
(e) for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Dynatech
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 24th day of April, 2000.
Dynatech Corporation
*
By: _________________________________
Name: Ned C. Lautenbach
Title: Chairman, President and
Chief Executive Officer
Pursuant to the requirements of this Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman, President and April 24, 2000
____________________________________ Chief Executive Officer
Ned C. Lautenbach
* Director, Corporate Vice April 24, 2000
____________________________________ President, Chief Financial
Allan M. Kline Officer and Treasurer
* Director, Corporate Vice April 24, 2000
____________________________________ President
John R. Peeler
* Director April 24, 2000
____________________________________
Joseph L. Rice, III
* Director April 24, 2000
____________________________________
Brian D. Finn
* Director April 24, 2000
____________________________________
Marvin L. Mann
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director April 24, 2000
____________________________________
Brian H. Rowe
* Director April 24, 2000
____________________________________
William O. McCoy
* Director April 24, 2000
____________________________________
Peter M. Wagner
* Director April 24, 2000
____________________________________
Victor A. Pelson
* Director April 24, 2000
____________________________________
Richard J. Schnall
</TABLE>
/s/ Mark V.B. Tremallo
By: ___________________________
Mark V.B. Tremallo
Attorney-in-fact
II-6
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of Dynatech Corporation of our report dated April 26, 1999
relating to the financial statements, which appears in the Annual Report on Form
10-K. We also consent to the references to us under the headings "Experts" and
"Summary Historical and ProForma Financial Data Schedule" in such Registration
Statement.
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 24, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Allan M. Kline and Mark V.B. Tremallo, and each of them,
with full power to act without the other, his true and lawful attorney-in-fact
and agent, in his name, place and stead to execute on his behalf, as an officer
and/or director of Dynatech Corporation ("Dynatech"), the Registration
Statement of Dynatech on Form S-1, S-2 or S-3 (the "Registration Statement"),
for the registration of rights to purchase newly issued common stock of
Dynatech and shares of newly issued common stock of Dynatech, and any and all
amendments (including post-effective amendments) to the Registration Statement,
and file the same with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission (the "SEC") pursuant to
the Securities Act of 1933, as amended (the "Act"), and any and all other
instruments which either of said attorneys-in-fact and agents deem necessary or
advisable to enable Dynatech to comply with the Act, the rules, regulations and
requirements of the SEC in respect thereof, and the securities or Blue Sky laws
of any state or other governmental subdivision, giving and granting to each of
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as he or she might or could do
if personally present at the doing thereof, with full power of substitution and
resubstitution, hereby ratifying and confirming all that his or her said
attorney-in-fact and agents or substitutes may or shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Ned C. Lautenbach
-------------------------------------
Ned C. Lautenbach
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach and Mark V.B. Tremallo, and each of
them, with full power to act without the other, his true and lawful attorney-
in-fact and agent, in his name, place and stead to execute on his behalf, as an
officer and/or director of Dynatech Corporation ("Dynatech"), the Registration
Statement of Dynatech on Form S-1, S-2 or S-3 (the "Registration Statement"),
for the registration of rights to purchase newly issued common stock of
Dynatech and shares of newly issued common stock of Dynatech, and any and all
amendments (including post-effective amendments) to the Registration Statement,
and file the same with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission (the "SEC") pursuant to
the Securities Act of 1933, as amended (the "Act"), and any and all other
instruments which either of said attorneys-in-fact and agents deem necessary or
advisable to enable Dynatech to comply with the Act, the rules, regulations and
requirements of the SEC in respect thereof, and the securities or Blue Sky laws
of any state or other governmental subdivision, giving and granting to each of
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as he or she might or could do
if personally present at the doing thereof, with full power of substitution and
resubstitution, hereby ratifying and confirming all that his or her said
attorney-in-fact and agents or substitutes may or shall lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Allan M. Kline
-------------------------------------
Allan M. Kline
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ John R. Peeler
-------------------------------------
John R. Peeler
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Joseph L. Rice, III
-------------------------------------
Joseph L. Rice, III
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Brian D. Finn
__________________________
Brian D. Finn
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Marvin L. Mann
---------------------------
Marvin L. Mann
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Brian H. Rowe
-------------------------------------
Brian H. Rowe
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ William O. McCoy
-------------------------------------
William O. McCoy
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Peter M. Wagner
-------------------------------
Peter M. Wagner
Date: April 14, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Victor A. Pelson
---------------------------------
Victor A. Pelson
Date: April 17, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Ned C. Lautenbach, Allan M. Kline and Mark V.B.
Tremallo, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, in his name, place and stead to execute
on his behalf, as an officer and/or director of Dynatech Corporation
("Dynatech"), the Registration Statement of Dynatech on Form S-1, S-2 or S-3
(the "Registration Statement"), for the registration of rights to purchase
newly issued common stock of Dynatech and shares of newly issued common stock
of Dynatech, and any and all amendments (including post-effective amendments)
to the Registration Statement, and file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the
"Act"), and any and all other instruments which either of said attorneys-in-
fact and agents deem necessary or advisable to enable Dynatech to comply with
the Act, the rules, regulations and requirements of the SEC in respect thereof,
and the securities or Blue Sky laws of any state or other governmental
subdivision, giving and granting to each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
whatsoever necessary or appropriate to be done in and about the premises as
fully to all intents as he or she might or could do if personally present at
the doing thereof, with full power of substitution and resubstitution, hereby
ratifying and confirming all that his or her said attorney-in-fact and agents
or substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on the date
indicated below:
/s/ Richard J. Schnall
------------------------------
Richard J. Schnall
Date: April 14, 2000
11
