By Dow Jones Business News, September 19, 2013, 08:35:00 AM EDT
Diversified testing-equipment company Agilent Technologies Inc. ( A ) plans to break up into two publicly traded firms
by spinning off its electronic-measurement products business, which has faced weak demand lately.
One company will be focused on life sciences, diagnostics and applied markets, will retain the Agilent name and is
expected to post revenue of $3.9 billion in fiscal year 2013. The other will be comprised of Agilent's electronic-
measurement products and is expected to post revenue of $2.9 billion.
Shares jumped 4.9% to $51.74 in recent trading Thursday. The stock is up 26% so far this year.
The company has a history of spinoffs and reinventions. Hewlett-Packard Co. (HPQ) decided to spin off its test and
measurement equipment operations in 1999, first creating Agilent. Since then, Agilent said it has undergone four major
spinoffs since 2005, including its spinoff around 2006 of chip-testing company Verigy Ltd., which rival Advantest Corp.
(6857.TO, ATE) bought in 2011.
"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," Agilent Chief Executive William
The company said the breakup would allow for greater management of the two businesses and allow the new Agilent to
focus more on the higher-growth life sciences, diagnostics and applied markets units, and reduce exposure to the more
cyclical electronic-measurement industry.
The new Agilent expects to continue paying a dividend at least at the present yield, while the electronic-measurement
company isn't expected to pay a dividend.
Ron Nersesian, who has been Agilent's chief operating officer, is CEO-designate of the new electronic-measurement
company. Neil Dougherty, who has been Agilent's treasurer, is chief financial officer-designate of that new company.
Under the plan, Agilent shareholders will receive new shares of the electronic-measurement company via a tax-free
spinoff. The spinoff isn't expected to affect Agilent's guidance for the year.
The diversified company's growth strategy has included acquisitions, such as its $2.2 billion acquisition of Denmark-
based cancer-diagnostic company Dako last year. The company also has been adding new products and increasing its
presence in emerging markets as it has aimed to offset weak demand in its electronic-measurement business.
Last month, Agilent said its fiscal third-quarter earnings fell as revenue weakness in the electronic-measurement
segment offset growth in other businesses.
Write to Ben Fox Rubin at email@example.com
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