J.P. Morgan & Co. and Credit Suisse First Boston delivered "highly confident" letters to Clayton, Dubilier & Rice Inc. last week regarding its $900 million recapitalization of Dynatech Corp., a Burlington, Mass.-based telecommunications service company.
Clayton Dubilier, a New York-based investment firm, announced Monday that it would lead a group of investors, including top management, to recapitalize the company. Clayton Dubilier will put $277 million of its own equity into the transaction.
When the transaction closes, Dynatech's top 300 employees will hold an equity interest of about 25% and the buyout firm about 70%. The other 5% will be held by Dynatech public shareholders.
The transaction is expected to close in the first half.
Dynatech makes testing equipment that companies use to install and maintain telecommunication networks. It also makes damage-resistant portable computers that service technicians use to do field repairs.
Clayton Dubilier manages $1.5 billion in equity capital. It was founded in 1978 and has invested in 26 companies with annual sales over $17 billion. It is well known for its buyouts of Kinko's Inc. and Lexmark International Group in recent years.
Bankers Trust is the administration agent on Dynatech's revolving credit facility, which was set up in June 1996.