Electronic Measurement Business to be Distributed to Shareholders
Through a Tax-Free Spinoff
Increases Strategic Flexibility of Both Standalone Businesses
Two publicly traded companies will offer shareholders distinct
opportunities with unique investment identities
$3.9 billion(1) Agilent life sciences, diagnostics, applied
$2.9 billion(1) electronic measurement company, to be named
Transaction leverages strategic and operational advancements and
improvements of both businesses
Allows management to focus exclusively on the customers of their
SANTA CLARA, Calif.--(BUSINESS WIRE)--Sep. 19, 2013--
Agilent Technologies Inc. (NYSE: A) today announced plans to separate
into two publicly traded companies: one in life sciences, diagnostics
and applied markets (LDA) that will retain the Agilent name, and the
other that will be comprised of Agilent’s current portfolio of
electronic measurement (EM) products. The separation is expected to
occur through a tax-free pro rata spinoff of the EM company to Agilent
“Agilent has evolved into two distinct investment and business
opportunities, and we are creating two separate and strategically
focused enterprises to allow each to maximize 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 capitalize 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
The New Agilent
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. It is expected that the new Agilent will continue to pay a
dividend at least at the present yield.
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.
“The board and I believe Ron is the right leader for the new company,”
said Sullivan. “He has an excellent track record of running this
business, and he has the vision and expertise to position the new
company for accelerated growth and success.”
The Agilent board of directors granted initial approval to pursue the
separation plan at its meeting on Sept. 18.
Under the plan, Agilent shareholders will receive a pro rata
distribution of shares in the new EM company via a tax-free spinoff.
Although there is no assurance that the separation will be completed
within this timeframe, the transaction is targeted to be completed by
the end of calendar 2014, subject to the satisfaction of closing
conditions, including, among others, obtaining final approval from the
Agilent board of directors, satisfactory completion of financing,
receipt of tax opinions, receipt of favorable rulings from the Internal
Revenue Service, the effectiveness of a Form 10 filing with the
Securities and Exchange Commission, and satisfying foreign regulatory
The spinoff is not anticipated to impact Agilent’s guidance for fiscal
year 2013. The company is expected to incur one-time charges related to
the transaction during the periods preceding the separation, to be
quantified at a later date.
For More Information
Agilent will host a conference call today at 5:30 a.m. (Pacific Time).
This event will be webcast live in listen-only mode. Listeners may
access the webcast and accompanying slides at www.investor.agilent.com.
The webcast will remain available on the website for 90 days.
A telephone replay of the conference call will be available at 7:30 a.m.
(Pacific) today through Sept. 26, 2013. The replay number is +1 888
286-8010; international callers may dial +1 (617) 801-6888. The passcode
For more details, see the fact sheets for Agilent
and the new EM
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is the world’s premier measurement
company and a technology leader in chemical analysis, life sciences,
diagnostics, electronics and communications. The company’s 20,500
employees serve customers in more than 100 countries. Agilent had
revenues of $6.9 billion in fiscal 2012. Information about Agilent is
available at www.agilent.com.
This news release contains forward-looking statements (including,
without limitation, information and future guidance on the company’s
goals, priorities, the planned separation of our Electronic Measurement
Group, revenues, demand, growth opportunities, customer service and
innovation plans, new product introductions, financial condition,
earnings, the company’s ability to pay dividends, ability to access
capital markets, the continued strengths and expected growth of the
markets the company sells into, operations, operating earnings, and tax
rates) that involve risks and uncertainties that could cause results of
Agilent to differ materially from management’s current expectations. The
words “anticipate,” “plan,” “estimate,” “expect,” “intend,” “will,”
“should,” “forecast,” “project,” and similar expressions, as they relate
to the company, are intended to identify forward-looking statements.
In addition, other risks that the company faces in running its
operations include the ability to execute successfully through business
cycles; the ability to successfully adapt its cost structures to
continuing changes in business conditions; ongoing competitive, pricing
and gross margin pressures; the risk that our cost-cutting initiatives
will impair our ability to develop products and remain competitive and
to operate effectively; the impact of geopolitical uncertainties on our
markets and our ability to conduct business; the ability to improve
asset performance to adapt to changes in demand; the ability to
successfully introduce new products at the right time, price and mix,
and other risks detailed in the company's filings with the Securities
and Exchange Commission, including our quarterly report on Form 10-Q for
the quarter ended July 31, 2013. Agilent undertakes no responsibility to
publicly update or revise any forward-looking statement.
(1) FY13 numbers are estimates based on company guidance
provided on Aug. 14, 2013. They are not a confirmation of guidance.
NOTE TO EDITORS: Further technology, corporate citizenship and executive
news is available on the Agilent news site at www.agilent.com/go/news.
Source: Agilent Technologies Inc.
Agilent Technologies Inc.
Amy Flores, +1 408-345-8194 (Editorial)
Rodriguez, +1 408-345-8948 (Investor)