PALO ALTO, Calif.--(BUSINESS WIRE)--Aug. 15, 2005--Agilent
Technologies Inc. (NYSE:A) today announced a series of actions to
enhance its focus as the world's premier measurement company and to
create tangible value for its shareholders. Today's announcements
include:
-
An agreement to divest the Semiconductor Products segment to
Kohlberg Kravis Roberts & Co. (KKR) and Silver Lake Partners
for $2.66 billion(1).
- A definitive agreement to sell its stake in Lumileds to Royal
Philips Electronics for $950 million plus repayment of $50
million of debt from Lumileds.
- Plans to spin off its SOC and Memory Test businesses as soon
as practical in 2006.
Agilent also announced it will return the cash proceeds of the
divestitures to its owners through a $4 billion share repurchase
program to commence immediately(2). The company also announced it
intends to call its $1.15 billion convertible debenture, which
potentially will reduce its outstanding shares by 36 million.
Bill Sullivan, Agilent president and chief executive officer,
said, "These actions enable Agilent to focus exclusively on realizing
its full potential as the world's premier measurement company, serving
global customers as the largest, most innovative and best-positioned
entity in the world. It has become increasingly clear that investors
also prefer this exclusive focus on the $40 billion measurement
market. Returning the proceeds of these divestitures via share
repurchases demonstrates Agilent's commitment to realizing superior
value for our owners as well as our customers."
The company currently expects that the divestitures will be
completed by the end of its fiscal year, Oct. 31, 2005, subject to
closing conditions, including governmental and regulatory approvals.
As part of its repositioning as a "pure play" measurement company,
Agilent expects to reduce its Global Infrastructure costs by $450
million, and infrastructure-related employment by about 1,300 jobs.
This reduction will be accomplished through a combination of employee
transfers to the divestiture and spin-off, attrition, and work force
reduction. The company expects this restructuring to be largely
completed by the middle of FY2006, and the roughly $200 million
implementation cost to be essentially offset by the proceeds of
property and other asset sales as the company reduces its global
footprint.
In lieu of the normal earnings conference call, Agilent management
will present more details on its third-quarter FY05 financial results
and the additional announcements made today during a meeting at the
Mandarin Oriental hotel in New York City beginning today at 8:30 a.m.
(ET). This event will also be webcast live in listen-only mode.
Listeners may log on at www.investor.agilent.com and select "Major
Announcement and Third Quarter FY05 Financial Results Conference Call"
under "News & Events - Calendar of Events."
A telephone replay of the meeting will be available one hour after
the conference call today through August 22.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is the world's premier
measurement company and a technology leader in communications,
electronics, life sciences and chemical analysis. The company's 28,000
employees serve customers in more than 110 countries. Agilent had net
revenue of $7.2 billion in fiscal year 2004. Information about Agilent
is available on the Web at www.agilent.com.
Forward-Looking Statements
This news release contains forward-looking statements as defined
in the Securities Exchange Act of 1934 and subject to the safe harbors
created therein. The forward-looking statements contained herein
include, but are not limited to, information regarding the enhancement
of shareholder value, the completion of the divestitures and Agilent's
expected restructuring and the reduction of infrastructure costs
following their completion, and Agilent's implementation of the share
repurchase program.
These forward-looking statements involve risks and uncertainties
that could cause Agilent's results to differ materially from
management's current expectations. Such risks and uncertainties
include, but are not limited to risks associated with the ability to
effect the divestitures on a timely basis, risks associated with
changes in demand for Agilent's products and risks associated with the
development generally of Agilent's overall strategic objectives.
In addition, other risks that Agilent faces in running its
operations include the ability to execute successfully through
business cycles while it continues to implement cost reductions; the
ability to meet and achieve the benefits of its cost-reduction goals
and otherwise 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 Agilent's filings with the Securities and
Exchange Commission, including its Quarterly Report on Form 10-Q for
the period ended April 30, 2005. Forward-looking statements are based
on the beliefs and assumptions of Agilent's management and on
currently available information. Agilent undertakes no responsibility
to publicly update or revise any forward-looking statement.
(1)Subject to closing adjustments.
(2)Agilent anticipates that share repurchases will be implemented
using a variety of methods, which may include open market purchases,
block trades, self tender, accelerated share repurchase transactions
or otherwise, or by any combination of such methods. The number of
shares to be repurchased and the timing of any repurchases will depend
on factors such as the stock price, economic and market conditions and
corporate and regulatory requirements. The stock repurchase program
may be suspended or discontinued at any time.
NOTE TO EDITORS: Further technology, corporate citizenship and
executive news is available on the Agilent news site at
www.agilent.com/go/news.
CONTACT: Agilent Technologies Inc.
Editorial Contacts:
Michele Drake, +1-650-752-5296
michele_drake@agilent.com
Amy Flores, +1-650-283-2413 (New York)
amy_flores@agilent.com
Jorgen Tesselaar, +31-20-547-2825 (Europe and Asia)
jorgen_tesselaar@agilent.com
Investor Contact:
Hilliard Terry, +1-650-752-5329
hilliard_terry@agilent.com
SOURCE: Agilent Technologies Inc.