Agilent to split into two companies

The board of directors at Agilent Technologies Inc. (NYSE: A) has granted initial approval of a plan to split the company in two. One company will focus on life sciences, diagnostics, and applied markets (LDA) and retain the Agilent name. The other company, as yet unnamed, will build on Agilent’s existing electronic measurement (EM) product lines. Both companies will be publicly traded; the split will occur through a tax-free pro rata spinoff of the EM company to Agilent shareholders that management hopes to complete by the end of next year.

Agilent says it expects its LDA business this year to earn $3.9 billion in revenues – about $1 billion more than the EM business. Current Agilent CEO William Sullivan will add the title of president after the split. Ron Nersesian, who has been Agilent’s president and chief operating officer, is now executive vice president of Agilent and president and CEO-designate of the new EM company. Neil Dougherty, who has been Agilent’s vice president and treasurer, is now vice president of Agilent and CFO-designate of the new EM company.

“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 Sullivan. The two businesses differ in their stability – the EM market is more cyclical than the LDA market, Agilent says – and investment profiles. For example, Agilent in a press release announcing the split described LDA as having “an attractive recurring revenue base, balanced geographic revenue profile, growth opportunities in emerging markets, molecular diagnostics and clinical markets, and significant margin-expansion opportunities.”

The new EM company, meanwhile, was described as “the world’s premier electronic measurement company, with a leading position in major markets including communications; aerospace and defense; and industrial, computers and semiconductors.”

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