Agilent Technologies splits measurement from life-sciences businesses
The company’s statement says that the two publicly-traded companies will offer shareholders distinct opportunities with unique investment identities; a $3.9 billion-turnover life sciences, diagnostics, applied markets company, that will retain the Agilent name; and a $2.9 billion-turnover electronic measurement company, to be named later. The “Transaction leverages strategic and operational advancements and improvements of both businesses,” and the move “Allows management to focus exclusively on the customers of their respective companies.”
"Agilent has evolved into two distinct investment and business opportunities, and we are creating two separate and strategically focused enterprises to allow each to maximise its growth and success," said William (Bill) Sullivan, Agilent president and CEO.
"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. "We are focused on making this transition seamless for our customers."
Agilent believes that the separation will result in material benefits to the standalone companies:
- Greater management focus on the distinct businesses of LDA and EM
- Ability for the LDA company to devote resources to the higher-growth LDA business, while reducing exposure to the more cyclical EM industry
- Ability for the EM company to devote resources to its own growth that were previously used to capitalise LDA
- Two independent and unique investment profiles
- Both companies will be well capitalized, having strong balance sheets and investment-grade profiles with target debt-to-EBITDA ratios below 2.0x
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.” FY13 estimated revenues are $3.9 billion. Bill Sullivan is president and CEO of Agilent, and Didier Hirsch continues as CFO.
The new EM company will be, “the world’s premier electronic measurement company, with a leading position in major markets including communications; aerospace and defense; and industrial, computers and semiconductors.” FY13 estimated revenues are $2.9 billion. The EM company initially is not expected to pay a dividend.
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. Neil Dougherty, who has been Agilent’s vice president and treasurer, is vice president of Agilent and CFO-designate of the new EM company.