Agilent to spin off electronic measurement business

Friday, 20 September, 2013

Agilent Technologies has announced plans to spin off its electronic measurement business into a separate public company.

The company plans to split into two publicly traded companies: one in life sciences, diagnostics and applied markets (LDA) that will retain the Agilent name, and the other in electronic measurement. The separation is expected to occur through a tax-free pro rata spin-off of the EM company to Agilent shareholders.

“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.

The new electronic measurement company will have a leading position in major markets including communications; aerospace and defence; and industrial, computers and semiconductors. FY13 estimated revenues are $2.9bn. 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.”

Agilent believes that the separation will result in material benefits to the standalone companies. These include: 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 capitalised, having strong balance sheets and investment-grade profiles with target debt-to-EBITDA ratios below 2.0x.

For more details, see the fact sheets for Agilent and the new EM company.