Agilent Technologies Inc. plans to separate into two publicly traded companies—one focused on life sciences, diagnostics and applied markets (LDA) and another that will be comprised of Agilent's electronic measurement (EM) products.
William Sullivan, Agilent's president and CEO, said through a statement that Agilent has a history of reinventing itself, beginning with its own spin off from Hewlett-Packard Co. 15 years ago. Agilent has had four major spinoffs since 2005, Sullivan noted.
"We are once again making a bold move, as we have done many times in the past, to ensure a future of sustainable growth for both the LDA and EM companies," Sullivan said.
Agilent said it believes the split can achieve greater management focus on the distinct businesses of LDA and EM. The split also allows the LDA company—which will retain the Agilent name—to devote resources to the higher-growth LDA business, while reducing exposure to the more cyclical EM industry.
Agilent said both of the resulting companies would have investment-grade profiles with target debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratios below 2.0x.
Sullivan will remain president and CEO of the new LDA-focused Agilent. Didier Hirsch will continue as Agilent's chief financial officer, the company said. This company is expected to have 2013 sales of an estimated $3.9 billion, Agilent said.
The new EM company will continue to serve major markets including communications; aerospace and defense; and industrial, computers and semiconductors. This company, which will be headquartered in Santa Rosa, Calif, is expcted to have sales of an estimated $2.9 billion in fiscal 2013, Agilent said.
Ron Nersesian, who earlier has been Agilent's president and chief operating officer, has been named executive vice president of Agilent and president and CEO-designate of the new EM company. Neil Dougherty, who has been Agilent's vice president and treasurer, was named vice president of Agilent and will be the chief financial officer of the new EM company.
The Agilent board of directors is targeting the transaction to be completed by the end of calendar 2014, assuming that the deal gets shareholder approval and satisfies other closing conditions.
Agilent has 20,500 employees in more than 100 countries. The company had revenues of $6.9 billion in fiscal 2012.
