Testing and measurement system supplier Tektronix plans to spin off its Videotele.com audio and video entertainment business as an independent company before taking it public.
The move follows the company's decision to sell its colour printer unit to Xerox earlier this month for $925 million.
Employees of Videotele.com, which provides equipment for delivering digital audio and video entertainment to the home over high-speed Internet connections, will take a 25 per cent equity stake in the new company.
Tektronix will initially maintain a 75 per cent share, but expects to reduce its ownership further by the end of the fiscal year 2000. The company also hopes to take the spin-off public.
Dan Brophy, Videotele.com's general manager and a Tektronix vice president, will become the spin-off's chief executive. Brophy was formerly Tektronix's president of Pacific and Americas operations.
"This is a very exciting time in the telecoms industry, and we are at the forefront of driving video and audio into the home over a variety of transmission networks," said Brophy.
Videotele.com will be based in Portland, Oregon, and Tektronix said it would continue to provide manufacturing and other services until the spin-off, which will have about 60 staff, is established. Videotele.com generated sales of about $40 million last year.
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