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Agilent splitting into two!

Posted: 23 Sep 2013     Print Version  Bookmark and Share

Keywords:Agilent Technologies  split  HP  life sciences  electronic measurement 

Agilent Technologies has decided to split itself into two companies. Agilent CEO William Sullivan terms the division as "the biggest and most profound change in our history."

"Agilent's history is one of reinvention, starting with our own separation from HP and including four major spinoffs since 2005. 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," he said.

The largest of the two new units—the Rs.24,528.30 crore ($3.9 billion) group which is in life sciences, diagnostics and applied markets (LDA) will retain the Agilent name. The group also considers moving into related markets such as gene sequencing. The remaining Rs.18,238.99 crore ($2.9 billion) group – yet to be named—will be comprised of Agilent's current portfolio of electronic measurement (EM) products.

"The trigger point that we needed to make the separation came in November 2010 when Agilent was reclassified as a health care company in the S&P 500," explained Bill Sullivan, who will remain as CEO of the new Agilent unit.

Agilent's traditional T&M and its growing medical instruments businesses have "two distinct investment and business opportunities," Sullivan said in a conference call. "Our investor base has changed dramatically [and] investors [in the higher margin health care sector] have difficulty understanding the volatility" of the traditional T&M business, he added.

The new Agilent will be a global leader in life sciences, diagnostics and applied markets, with an attractive recurring revenue base, balanced geographic revenue profile, growth opportunities in emerging markets, molecular diagnostics and clinical markets, and significant margin-expansion opportunities, Sullivan said.

The new EM company will be the world's premier electronic measurement company, with a leading position in major markets including communications; aerospace and defence; and industrial, computers and semiconductors.

Ron Nersesian, who has been Agilent's president and chief operating officer, is executive vice president of Agilent and president and CEO-designate of the new EM company, effective immediately.

Under the plan, Agilent shareholders will receive a pro rata distribution of shares in the new EM company via a tax-free spinoff. The transaction is targeted to be completed by the end of calendar 2014.

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