Teradyne Announces Investment in Software Test Units; Matrix Partners to Assume a Controlling Interest in New Company

BOSTON--(BUSINESS WIRE)--Sept. 6, 2000--Teradyne (NYSE:TER) announced today that it will be consolidating its software test units, acquired over the last several years, into a single company to be called Empirix. The employees of Empirix and an investor group led by Matrix Partners of Waltham, Massachusetts will own a controlling interest in the new company, with Teradyne retaining an ownership position. The date of the transaction is subject to certain closing conditions, including receipt of regulatory approvals and is expected to be completed at the end of the fourth quarter of 2000. Other terms of the agreement were not disclosed. There will be no material impact on Teradyne's financial position as a result of the transaction.

"Software test is a very exciting business," said George Chamillard, Chairman and CEO of Teradyne. "We feel that the seeds we have sown with our acquisitions will continue to bear significant fruit over the next few years. It's clear, however, that the fast-growing software test technology and markets are diverging from Teradyne's core businesses, which are also growing rapidly. It will take focused time, energy and expertise to grow the new company to its full potential. We decided that our employees and shareholders would benefit greatly through this partnership with Matrix who will help develop Empirix through its next stages of growth and success, allowing Teradyne to concentrate on its fast-growing automated testing and interconnection businesses."

"Teradyne has done a great job of assembling an exciting group of companies possessing excellent customer relationships and key technologies in growing markets," said Tim Barrows of Matrix Partners. "We believe Empirix will become a major force in the software test industry."

About Teradyne, Inc.

Teradyne is the world's largest supplier of automatic test equipment, related software and high performance backplanes for the electronics and telecommunications industries. 1999 sales were $1.8 billion and there are currently more than 8600 Teradyne employees worldwide. Teradyne products are used to test semiconductors, circuit assemblies, telephone lines, networks, computerized telephone systems, and software. Teradyne's backplane assemblies and high-density connectors are used in high-performance electronic systems in communications and computing. More than 70% of the company's business is being driven by Internet growth.

About Matrix Partners

Since its inception in 1977, Matrix Partners has been dedicated to helping outstanding entrepreneurs build industry leading technology companies. Matrix is focused on companies that provide products and services that drive the Net Economy with a particular emphasis on e-business solutions, Internet commerce and the communications infrastructure. With offices in the two major technology centers - Boston and Silicon Valley - it has developed an exceptionally strong network of contacts and entrepreneurial know-how. Companies that have gone public out of the Matrix portfolio in the last eighteen months and that Matrix played a founding role in have generated more than $85 billion of market value. These include ArrowPoint Communications (recently acquired by Cisco), Alteon Web Systems (Nasdaq:ATON), Blue Martini Software (Nasdaq:BLUE), BeFree (Nasdaq:BFRE), OnDisplay (recently acquired by Vignette), Phone.com (Nasdaq:PHCM), SilverStream Software (Nasdaq:SSSW), Sonus Networks (Nasdaq:SONS) and Sycamore Networks (Nasdaq:SCMR).

“Teradyne has done a great job of assembling an exciting group of companies possessing excellent customer relationships and key technologies in growing markets”